Auditor's liability

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This query is : Resolved

Hardik Lakhani (Querist)

15 February 2012 Dear expert,

While going through the ICAI material, liabilities of auditor are distinguished as civil liabilities and criminal liabilities..

Kindly explain the difference..

Is the difference merely limited to intention...

Thank You

CS Mitesh Mehta

CS Mitesh Mehta (Expert)

15 February 2012 A civil action against the auditor may either take the form of claim for damages on account of negligence or that of misfeasance proceeding for breach of trust or duty.

Criminal liability;

Under section 63 of the Companies act, an auditor is criminally liable for making any misstatement or untrue statement in prospectus can be sentenced for imprisonment.

Under section 628 pf the companies act, an auditor is liable for criminal prosecution, if he in any return, certificate, balance sheet, prospectus, statement or other documents required by or for the purpose of the Act, makes a statement (a) which is false in any material particular knowing it to be a false or (b) which omits any material fact knowing it to be a material. If convicted he can be punished with imprisonment.

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