Private limited company is the one of the most popular forms to start a company. Private limited companies are the companies with limited liability. There are compliances which must be followed after the company has been incorporated. The private limited company has greater flexibility.
The audit is a detailed examination of accounting records undertaken with a view to establishing the correctness. An auditor shall not be appointed as auditor unless the person is practicing Chartered Accountancy. Auditor's work involves an intelligent scrutiny of the books of account of a Company with reference to documents, vouchers and other relevant records to ensure that the entries made therein give a true picture of business, Therefore, there is need of the Statutory Auditor
Appointment of Auditor Companies need to maintain books for which companies appoint an auditor. These are mainly with the companies which follow norms of Companies Act, 2013. The auditor is appointed for 5 years and form ADT-1 is filed for 5 years. Companies registered under Companies Act 1956 also require appointment of auditor of the company.
Statutory Audit- The purpose of this type of audit is same as any other type of audit. The auditor is a need for determining whether a company is providing fair dealing of its financial condition by providing bank balance, financial transactions, etc. Therefore appointment of an auditor in every private company is mandatory. In the case of a new business, the auditor has to be appointed within one month of the inauguration of the enterprise.
People disqualified for appointment of auditor
- Officer or employee of the company
- People who relatives or partner, holding any security of the company.
- Person as an employee of the company.
- Person or firm having directly or indirectly had any Business relation.
- Person involved in an offense or any fraud.
- Person whose subsidiary, associated company or entity engaged in date of appointment in consulting and services.
Limitation on Services of Statutory Auditor
There are certain limitations on the services that can be provided by the auditor. These are services are appointed by the Board of director or the Audit Committee. Following are the services that can be provided by the Statutory Auditor.
- Internal Audit
- Accounting and
- Actuarial Services
- Investment Advisory Services
- Investment Banking Services
- Management and Outsource services
- Services under rule