Statutory Audit

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CA Ysil Karunai (Querist)

27 May 2010 Dear Sir,
Whether a company is not maintaining a Fixed Assets Register from the date of incorporation itself, What is the duty of Auditor with regard to Physical verification of Fixed Assets?
Company's Turnover during the year Rs. 30 crores, Fixed Assets 1.75 Crores, Loan from Financial Institution Rs. 50 lacs
Query:
1. What is the reporting requirement under CARO and Section 227?
2. How should the Auditor frame the report with regard to Non-maintainence of Fixed Assets register, and physical verification?

Abhishek

Abhishek (Expert)

29 May 2010 Dear Yasil,

So far the maintenance of Fixed Asset register and physical verification of Assets is concerned, there is a Disclosure requirement in CARO (Point-i(a) and (b)) regarding the maintenance of proper records and physical verification of assets by the management;

The Auditor bears the responsibilty to report that only;

However,If there is a doubt regarding the physical existense of the assets the Auditor can suitably qualify its report becuase in that case financial statements will not give a true and fair view.

Feel free for further discussions.

Thank You

Abhishek

Abhishek (Expert)

29 May 2010

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