A company is required to prepare financial statement for period ending 31st March every year. Such financial statement must be give a true and fair view of the state of affairs of the company and comply with the accounting standards notified by the central government under Section 133 of the Companies Act. Such financial statement must be prepared in the form and format which may prescribed for a specific type of company for a private limited company schedule VI is the appropriate form. The expression financial statement includes following items:
To conduct audit of the company the first auditor must be appointed by the Board of Directors within a period of 30 days from the date of incorporation of the company. An auditor means a chartered accountant or a firm of chartered accountants, which is qualified to be the auditor of the company and who have given his consent to be appointed as audit of the company. However, in case the Board of Directors fails to appoint the first auditors than the shareholders of the company in the extraordinary general meeting can appoint the first auditor within 90 day
In the first general meeting the auditor need to be appointed to hold office for a period of 5 years. However, the appointment of auditor must be ratified in every subsequent annual general meeting.
Audit is a very serious business and auditors are expected to be vigilant and careful while doing audit of a company. The auditors are not required to verify each and every transaction of the company, however he must develop an audit plan which ensures that sufficient information and management representation is gathered so that the auditor is able to ascertain whether the financial statement gives true and fair view of the State of Affairs as at the end of its financial year.
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