Company is the artificial being which separate entity from the

owner or management. At the end of the period company's

financial statement must be submitted to the user after proper

examination by the auditor. when an auditor apply auditing

activities to examine the statement in order to give expert

opinion their on such types of Auditing activities are called

company audit. Under the section 183(3) of the company Act

1994:Company Audit means “The balance sheet and profit

and loss account or income or expenditure account, cash

flow statement of a company shall be caused to be audited

by the auditor of the company as in the companies act

provided. and the auditors report shall be attached there to

and the report shall be read before the company in General

meeting”.

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He must conduct compliance procedure to ensure the reliance

he can place on the efficiency of the internal control system. To check various assertions of financial data reflected in P & L account

for balance sheet, he must perform substantive procedure to check

the correctness, completeness & validity of the data.

In addition to the above, the auditor ensure that the transaction of

the company do not violate the provision of companies act in as

much as they get reflected in financial statements which he

certifies. For this purpose, important provisions of companies Act

affecting the financial transactions of the company are presented

in the chapter.

The auditor has to see that the items of revenue, expenditure &

item’s of assets & liabilities do get reflected in P & L account &

balance sheet as per the information requirements specified in

schedule VI of the act . He must ensure that the financial

statements reflect true & fair view of the trading results & financial

status of the company pertaining to the period under audit.

Section 210 and 211of the company act 1994 deal with issue of appointment of

the company auditor. Section 233 the company act 1994 deal with issue of

appointment of auditor in a special situation. Appointment of auditor are guided by

the securities and exchange rules 1987.Provision regarding appointment of a

company auditor are as follows:

Appointment of auditor in case of casual vacancy

Appointment of auditor by govt In a Listed Public Limited Company

Appointment of auditor by government

Reappointment of the retiring auditor

Appointment of auditor by a public limited company

Appointment of subsequent auditor

Appointment of first auditor

Appointment of first auditor: According to Section 210 (6) of the company act

1994 Important provision in this regard are followings:

The first auditor of a company shall be appointed by the board of directors of the

company.

The appointment of the first auditor shall be made within one month of the date

of registration of the company.

The auditor so appointed shall hold office until the conclusion of first annual

general meeting.

If the board of directors fails to appoint the first auditor within one month of the

date of registration.

Appointment of subsequent auditor: According to Section 210 (1) of the

company act 1994 important provision are followings:

Every company at each AGM appointing the subsequent auditor.

The auditor are appointed to hold office of the from the conclusion of the AGM

unit the next AGM.

The company shall within 7 days of the appointment give intimation thereof to

every auditor so appointed.

No person can be appointed auditor of the company unless his of her written

consent.

Every auditor appointed at annual AGM under within thirty days

Appointment of auditor by a public limited company: The public limited

company enlisted with any stock exchange shall appoint a partnership firm of

chartered accountants consisting of not less than two partners in practice for a

minimum of seven years none of whom are associates in a any way of the public

limited company during the auditing period.

Reappointment of the retiring auditor: Under section 210(3)

at any annual general meeting a retiring auditor by whatsoever authority

appointed shall be reappointment, unless:

The retiring auditor is not qualified for reappointment.

The retiring auditor has given a company notice in writing of his or her

unwillingness to be reappointment.

A resolution has been passed at the meeting appointed somebody else instead of

the retiring auditor.

Appointment of auditor by government: According to section 210(4) and

210(5) important provision in this regard are:

if an appointment of an auditor is not made at the annual general meeting, the

govt may appoint a person to fill the vacancy.

The company shall within 7 days of the govt power becoming exercisable give

notice of the fact of the govt that is no auditor was appointed or reappointed.

If a company fails to give such notice the company & the every officer of the

company who is in default shall be punishable with fine which may extent to

one thousand taka.

Appointment of auditor by government In a Listed Public Limited

Company:

Whenever the SEC deems it necessary to an audit in a listed public limited

company in the public interest the SEC may appoint auditor to do the audit

within the specific time & to furnish the audit report to the SEC.

If the listed public limited company fails to get its financial statements audited

in prescribed manner & fail to submit the audited financial statement within

the prescribed time the SEC may appoint the required auditor.

Appointment of auditor in case of casual vacancy : Important provision in

this regard is:

The board of directors may feel any casual vacancy in the office of any

auditor,

Where such vacancy is caused by the registration of an auditor; the vacant

shall not be filled by the company in general meeting.

Any auditor appointed in a casual vacancy shall hold office until the

conclusion of the next AGM.

Disqualifications :A body corporate;

An officer or employee of the company.

A person who is partner, or who is in the employment of an

officer or employee.

A person who is obliged to the company for an amount one

thousand taka, or who has given any guarantee or provided any

security in connection with the indebtedness of any third

person.

A person who is a director or member of a private company or

partner which is the managing agent or treasurers of the comp.

A person who is a director, or the holder of shares exceeding

five percent in nominal value of the subscribed capital.

under section 210(10)

• auditor appointed as first auditor by the Board of Directors, the remuneration is fixed by the Board of directors.

• auditor is appointed by the Government, the remuneration is fixed by the Government.

• If the auditor is appointed by company in the general meeting, the remuneration of auditors shall be fixed by the company

Under section 210(11)

• For the purpose of section 210(10). Any sums paid by the company in respect of the auditor’s expenses shall be deemed to be included in the expression “remuneration”

Requirements as rofit and Loss

Account

• The profit and loss Account shall contain or give by way of a note detailed information in regard to amounts paid to the auditor, whether as fees, expenses or otherwise for services rendered:

• 1. as auditor;

• 2. as advisor, or in any other capacity in respect to-

• taxation matters.

• company law matters

1. To certify statutory report

2. To report to the members of the company

3. To inquire into particular issues

4. To certify director’s declaration of solvency.

5. To report for prospectus.

6. To assist inspects

7. To assist public prosecutor

Access to the book, account and vouchers

Obtaining information and explanations

Inquiring into particular issues

Receiving notice and attending the general meeting

Reporting to the members.

Visiting branches and access to the branch account.

Signing the audit report.

Receiving remuneration.

Removal of Auditor before the expire of Tenure: There is

no provision regarding the removal of Auditor before the expire of his or

her tenure. However from various provisions can be identified in this

regards:

For natural reasons of death or incapacity.

Self removed through resignation from the assignment of duties.

For dishonesty or disqualification.

Removal of Auditor after the expire of Tenure: According to

section 210(6), 210(9) and 211,

The first auditors of a company is appointed by the board of directors

prior to the first annual general meeting. That’s why, remove to first

auditors and appoint in his place any other person who have been

nominated for appointment. The nomination notice has been given to

the member not less than fourteen days before the date of the meeting.

Any auditor other than first auditor may be removed from

office before the expire of his term only by a special resolution

of the company in the general meeting.

The retiring auditor has the right to make a representation

which may be circulated to the members unless it is too late to

do so, without prejudice to his or her right to be heard orally,

require that the representation shall be read out the meeting.