You are the auditor of S.K Ltd. While conducting the audit of the company for the year ended 31 December 2017, you wanted to refer to the minutes book but the Board of Directors refused to give these books to you.
Required:
Discuss the implications of the directors’ action. (5 marks)
View Solution
- Section 133 (a) confers upon the auditor the right of access to the records, books, of accounts and vouchers of the company. Books include minutes books of general meetings as well as meetings of the board.
- This right has been conferred upon the auditor to enable him to express an opinion on financial statement which are derived from the records, books of accounts and vouchers. Under the 5th schedule of the companies’ code 1963, Act 179, auditor has a duty to report whether the company’s balance sheet and profit and loss account are in agreement with books of accounts and return.
- In the present case, auditors have been denied the access to minute books. The auditors need minutes books of the meetings of the board and shareholders to verify/vouch transactions and decisions.
- Such a denial constitute a limitation on scope of audit. He may extend audit procedures and express a qualified opinion or disclaimer of opinion in his audit report.