What are the different classes of auditors?

Ans.

DIFFERENT CLASSES OF AUDITORS

(a) Joint Auditors

Section 2 (9) defines a branch as: “branch office” in relation to a company means.

(a) any establishment described as a branch by the company: or

(b) any establishment carrying on either the same or substantial the same activity as that carried on by the head office of the company; or

but does not include any establishment specified in any order made by the Central Government under Section 8.

Thus this definition covers not only branches described as such by a company but also includes any establishment where production, processing and manufacture of goods is carried on.

Sometimes one or more auditors are appointed when the business of the company extends over a large area to enable the auditors to finish the work more quickly and efficiently. In such a case the auditors have a joint responsibility. In order to avoid a joint responsibility it will be better if the work between them is divided and the auditors make a declaration in their report as to what work has been performed by each one of them to avoid the responsibility of the work which was not performed by a particular auditor.

(b) Branch Auditors

According to Section 228 of the Companies Act, 1956, a company having a branch shall get the accounts of that branch audited by its auditor appointed under Section 224, or by any person qualified under Section 226. If the branch is in a foreign country, by the auditor of the company or by any person who is qualified under Section 226, or by an accountant duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of that country.

Where the accounts of any branch are audited by a person other than the company’s auditor, the company’s auditor-

(a) shall be entitled to visit the branch if he deems it necessary to do so for the performance of his duties as auditor; and

(b) shall have a right of access at all times to the books and accounts and vouchers of the company maintained at the branch office :

Provided that in the case of a banking company having a branch office outside India, it shall be sufficient if the auditor is allowed access to such copies of, and extracts from, the books and accounts of the branch as have been transmitted to the principal office of the company in India.