Signing Date of Auditor's Report

[Suman Bhambore R]

Dear Members,

Auditors Report can be signed after the date of Board Meeting held for adoption of Audit Report..? Or 

It has to be signed before the date/on the date of Board Meeting kept for adoption.

If yes which section of companies act speaks about date of signing of Auditor's Report.

We are facing a problem as below:

In one of our company:

29.09.2014: Board Meeting held

1. For adoption of Audit Report 

2. For Approval of Directors Report 

3. For Approval of Financials of the company

30.09.2014: Date of AGM

Now the problem is Auditor has signed the Audit Report and Financials of the Company on 30.09.2014. (Directors Signed the financials on 29.09.2014)

Is there any consequences...?

Please guide us.

 

Regards,

Suman R

[Jayashree Chandrasekaran]

The sequence is like this.....Directors must sign the financials first and then the Auditor signs and once he signs and gives the Audit report the Directors will have to give replies to the qualification if any.....hence for convenience sake everything is dated on same date

The date of BM has to be shifted to 30th September and you will also have to get share holders consent to conduct AGM at short notice on 30th September

Jayashree

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C.JAYASHREE
PROPRIETOR
S.GANESH&ASSOCIATES
CHENNAI
98840 17120

[BALAJI BALAJI]

Dear Friend,

From your mail, I am surprised to notice that you have convened AGM  on 30.09.2014 in the  board meeting held on 29.09.2014 giving only one day notice. Please explain how it is possible.

Coming to your query, I would like to clarify you as follows;

1. Signing of Financial Statements & Board's Report

As per section 134 of the Companies Act, the financial statements shall be approved by the Board of Directors before they are signed. Therefore, the signing of the financial statements is allowed only after the approval of the Board of Directors. As a matter of  practice, most of the Companies ensure that their directors sign the financial statements on the board meeting date itself.  There is no hard and fast rule that the directors should sign on the board meeting date itself, it could also be dated subsequent to board meeting date but before AGM date.

As regards, Board's Report, the same principle applies. Since Board's Report is an attachment to the Financial Statements.

2. Date of signing the Audit Report

As per section 134(1), the financial statements have to be approved by the Board of Directors for submission to the auditor for his report thereon.

Therefore, it is interpreted that the date of signing the audit report need not be the same date that of the financial statements.

In your case, the financial statements were approved by the Board in their meeting held on 29.09.2014 and it was dated the same day. On submission of the same to the auditors for their report thereon, there is no wrong in dating the auditors report on the very next day i.e.30.09.2014. 

I have submitted my views, if anyone could challenge, please.

Regards

G Balaji

Learn to Love; Love to Learn.

80562 44565

On Wed, Nov 19, 2014 at 3:18 PM, Suman Bhambore R <suma...@gmail.com> wrote:

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[Jayashree Chandrasekaran]

I agree that the audit report need not be dated on the same day as financials....however you cannot have a directors report approved before the audit report isnt it???

Jayashree

[Suman Bhambore R]

Dear Ma'am & Sir,

Thanks for your response. 

Yes, we have issued shorter notice and all for conducting AGM at shorter Notice.

 

As Jayashree ma'am said my point also same director report can be signed before audit report signing date...?

In our case DR is signed on 29.09.2014 and Audit report signed on 30.09.2014. 

Financials signing date is ok. But what about Audit report signing date...?

We have already filed MGT-14 for approval of DR.

And now auditor is not ready to sign the report again back dated as 29.09.2014.

What will be the solution in this case...?

Thanks in advance. 

Regards,

Suman R

[BALAJI BALAJI]

Dear Ms. Jayashree,

You are correct, as per section 134(3), a report by its Board of Directors shall include, inter alia, the following;

(f) explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made -

     (i) by the auditor in his report; and

     (ii) by the company secretary in practice in his secretarial audit report;

From the above, it is interpreted that the Board's Report should also focus on the Auditors Report before it gets approved by the Directors for signature. This is very much true and fair from the Companies Act 2013 perspective which is applicable to the financial statements of the Company from the financial year 2014-15 onwards.

However, the financial year in question is FY 2013-14, and I take benefit of section 217(3) of the Companies Act 1956 wherein it has been mentioned that the Board shall also be bound to give the fullest information and explanations in its report aforesaid, or, in cases falling under the proviso to section 222, in an addendum to that report on every reservation, qualification or adverse remark contained in the auditors' report.

The conclusion of my view is that Board's Report pertaining to FY 2013-14 could be dated prior to the date of Auditors' Report in view of the provisions of the Companies Act 1956.  If there is any adverse remark by the auditors in their report, it could be made as addendum to the Board's Report subsequently.

Hope I have made my views clear, if not please let me know.

Regards

G Balaji

Learn to Love; Love to Learn.

80562 44565

On Wed, Nov 19, 2014 at 4:30 PM, Jayashree Chandrasekaran <jayak...@gmail.com> wrote: