Liability of an Auditor | Auditing | ICAI | BCom Sem 6 | VNSGU |

Описание: CRIMINAL LIABILITY:

(1) Misstatement in prospectus (Sec. 134)
If a prospectus includes any untrue statement or misstatement, the auditor who authorized the issue of prospectus can be sentenced to imprisonment for a term which may extend to ten years or a fine which shall not be less than the amount involved in fraud and which may extend to three time the amount involved in the fraud (Sec. 447) The auditor can escape liability if he proves the statement was immaterial; or he had reasonable grounds to believe that the statement was true.

(2) Penalty for non- compliance by auditor
If an auditor of a company contravenes any of provision relating to appointment of auditor (Sec 139); Contents of audit report (Sec 143); compliance with auditing standards (Sec 143 ); Rendering prohibited services (Sec 144) signing of audit report (Sec 145) The auditor shall be punishable with fine which shall not be less than Rs 25,000 but which may extend to Rs 5,00,000. If an auditor has contravened such provision knowingly or with fully with the intention to deceive the company or its shareholders; or its creditors or its tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and fine which shall not be less than Rs 1,00,000 and may extend to Rs 25,00,000.
If an auditor has been convicted of an offence as stated above. He shall be liable to refund the remuneration received by him from the company and pay for demages.

(3) Production of documents and evidence (Sec. 217)
The auditor of a company is required to give assistance to an inspector appointed by the central government to investigate the affairs of the company. In case of refusal or failure to produce documents , an auditor shall be punishable with an imprisonment and fine.

(4) Power to summon persons suspected of having property of a company
During the course of winding up of a company the National Company Law Tribunal (NCLT) may summon before it auditor if has or is suspected to have possession of any property or was books or papers of the company or is capable of giving any material information with regards to the company to the Tribunal, If he fails to appear before the tribunal he can be arrested.

(5) Penalty for false statements
If any person deliberately make a statement in any return,reports certificate, balance sheet, prospectus, statement or other document which is false in any material respect or deliberately omits any material fact, he shall be punishable under section 447.

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