Not proper reporting in audited financial statements: Penalty imposed on auditor for violation of section143 of the Companies Act 2013
Corporate and tax professional may note the following are the detailed compliances required to be reported in the Audit report by the Auditor but failed to report:
1. The Auditor failed to comment for not attaching the cash flow report along with financial statements as required Section 2(40) of the CA 2013.
2. The Auditor failed to comment on the company not showing different class of share capital (Different classes of Preference shares to be treated separately) in its financial statements
3. The Auditor failed to comment about the non- reporting of related party transaction including the nature of related party irrespective of the transaction
4. The Auditor failed to comment on the Loans from Directors under the term of long term borrowings head whether secured or unsecured( nature of security of such loans)
The Revenue from sale of products , sale of services and other operating revenues also required to be mentioned separately but dropped the proceedings since it was mentioned clearly in the financial statements
The Auditor has been slapped with penalty of INR 15,000 under Section of 450 of the Companies Act 2013.
The copy of the penalty order is as under:
