Can anyone please confirm:
Whether any reservation, qualification or adverse remark made by Auditor in its report needs to be in italics/highlighted only and if no highlight or italic remark is made in its report the same should be assumed to be a clean report.
Rgds
Angna
Hi Angna,
As per Section 227(3)(e) of Companies Act 1956, auditor in his report shall state in thick type or etalics the observations or comments which in his opinion have adverse effect on the functioning of the company. Thus if there are no highlights or italic remarks in auditor's report same may very well be assumed to be as clean report.
Tell me if I m wrong.
No, in my opinion it is not a clean report only on account of the reason that it is not written in italics or bolded words.
No what i want to say is that if there are no adverse remarks at all then it will be a clean report. But if adverse remarks are there then they must specifically be in bold/italics. But if adverse remarks are not in bold/italcs then also it wiill not be a clean report.
Its a fact that adverse comments should be in bold/italics, but even if its not done so, still adverse comments may be shown depending upon the seriousness of the matter.
The fact that the remarks are not in a particular form does not make it a clean report.
CAclubindia
