| Topic : Essentials for Corporate law |
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Activity:
9 comments
832 views
last activity : 07 06 2010 20:18:04 +0000
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Where a company has many transactions and the business volume or the turnover is more, then, the comapny is advised to have a strong internal auditing mechanism which consists of audittors and chartered accountants too being the employees of the company who will ensure maintainance of accounts, transactions etc. in accordance with the generally accepted principels, accounting standards and the requirements of the companies act.
It is to be well uderstood from the point of view of the responsibilities of Chartered Accountants who audit the comapny accounts finally. It is not sufficient for the chartered accountant to look at the fianl accounts like the profit and loss account, balance sheet, schedules and the disclosures as required by the companies act. The Chartered Accountant is burdened with ensuring as to whether the company presents the true and fair view, whether the transactions are supported by the documentary proof, and whether the company has complied with all the rules and regulations as prescribed under the comapanies act, 1956 and the list of functions is inclusive. Now the question is, is it possible to a company secretary to look into all the issues at once and if it is so, the chartered accountant may not be able to audit the accounts of one company. What the chartered accountants normally do is to audit the accounts as presented and with the aviallable information and with such probing as necessary, but, there exists too many limitations or the hurdles in doing a true auditing. The Chartered Accountants are not to be blamed at all for this. Auditing plays very important role as the share holders believe in the auditied accounts and the shareholders invests in the comapny looking at the final accounts.
As such, marching towards good corporate governance, every affordable company, can have an internal auditing mechanism based on its plan and with such guidance from the comapny secretaries and from the beginning itself, the transactions will then be recorded in accordance with the accounting practice and finally the Chartered Accountant who audits the comapny acounts, may feel it free to audit the accounts then. Though, the intenal auditin mechanism can be optional, it is like mandatory if we see the implications, the realities, the rules and regulations and the object etc.
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