8/6/2019 CL Study Lesson 21

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STUDY XXI

CORPORATE ACCOUNTABILITY 

ACCOUNTS AND AUDIT – IACCOUNTS

Section 209

Proper books of accounts shall be maintained withrespect to:

a. All sums of money received and expendedb. Sales and purchases of goods by the Companyc. The assets and liabilities of the companyd. Cost records for production, processing,

manufacturing, mining activities

Books of A/c’s:

- shall be kept at the registered office- may be kept at such other place if:

The BOD decidesIntimates the ROC within 7 days (in form 23AA)- Accounts of the Branch Office to be kept at R.O- Shall be preserved for a period of 8 years

Inspection of Books of Accounts:

- Directors may inspect books of A/c’s- A director may also appoint an agent to inspect- Shall be kept open for inspection on working

days during business hours- Inspection is not allowed if it is passed to rivals

Inspection by Registrar/SEBI (Section 209A)

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- ROC may inspect- Other officers may also be authorized by CG

Member’s right of inspection

- members have no right to inspect(Lathika Rajyalaxmi Vs. Indian Motors Co.)

- Board may authorize the members- Company may authorize in general meeting

** Auditor shall have a right to inspect all the timeunder section 227

*** MD/MGR & Directors etc. are responsible formaintaining the books of A/cs

** Default is punishable with Rs.10,000 or 6 monthsImp.

Maintenance of Cost Records and Stock Records

- Companies engaged in Prodn, manf, mining &processing

- Shall maintain such records

Other Statutory Books & Statistical Books

Study material Page No.s 922-4

Annual Accounts:

Balance Sheet & Profit and Loss Account

Compliance with Accounting Standards:

Approval of Accounts by Board of Directors

Authentication of Balance Sheet and P&L A/c by BOD

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Laying of Accounts before the members

Circulation of Balance Sheet and Auditors Report

Adoption of Accounts at AGM

Filing of Annual Accounts with ROC

Directors’ Report

Events occurring after Balance Sheet Date

Signing of Board’s Report

Liability for statements in the Board’s Report

Compliance Certificate

Corporate Governance Report

Accounts of Holding and Subsidiary Companies

Audit

Need for Audit

Appointment of Auditor

Qualifications of Auditor

Disqualifications of AuditorMethod of appointment of auditor

First Auditors

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Subsequent appt of Auditors

Ceiling on appt of auditor - 224(1B)

- Any no. of private companies- Total 20 public Companies- Only 10 public companies (whose P/c is 25 lacs)

 Term of office of Auditor

Re-appt of Auditor

Appt of Auditor other than the retiring Auditor

Rights of Retiring Auditor (225)

Appt of Auditors by Special Resolution

Resignation and Removal of the Auditor