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Preservations of Records by Statutory Auditor

Pramod (SERVICE) (30 Points)

25 November 2010

What is the prescribed period for which the auditor should maintain the audit working papers/files? In case some criminal case has been intitiated against the statutory auditor in 1997 which are still going on and in another investigation intiated against him in 2009 can he say legally that the records are more than ten years old and the same have been destroyed. Is he liable for action for non-cooperation for misleading the investigation or guilty of misconduct .

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nandini mishra (individual) (592 Points)
Replied 25 November 2010

This opinion is taken from site knowledgebilie.com

1.The Committee notes that para 14 of Statement on Standard Auditing Practices: ‘Documentation’ (SAP 3), issued by the Institute of Chartered Accountants of India, requires as below:

“14. The auditor should adopt reasonable procedures for custody and confidentiality of his working papers and should retain them for a period of time sufficient to meet the needs of his practice and satisfy any pertinent legal or professional requirements of record retention.”

2. The Committee notes that the professional requirements regarding custody of the audit working papers are contained in the decision taken by the Council at its 22nd meeting held on 30th and 31st May and 1st June, 1957 and published in ‘The Chartered Accountant’ (January 1958) as below:

“Certain references were made to the Council seeking advice about the period for which a chartered accountant should preserve records relating to audit and other work done including routine correspondence and other papers. After a careful consideration of the matter, the council recommends that an auditor should maintain his records relating to audit and other work done including routine correspondence and other papers for a minimum period of ten years.”

3. Based on the above, the Committee is of the following opinion on issues raised at para 3 of the query.

(i) The professional requirements regarding maintenance of audit papers/files are as contained in the decision of the Council reproduced at para 2 above. The Committee, however, notes that the limit of 10 years is the minimum period as per the aforesaid decision and that it would be relevant to those records in respect of which no legal or professional proceedings are pending.

Opinion October 17,1997