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Signing of audited balance sheet by directors

CA. Rashi Goyal (Chartered Accountant) (512 Points)

04 December 2009

Hi,

Is there any violation, if directors sign the audited financial statements on different dates and on different places.

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8 Replies

CA SUDIPTA SINHA (Commerce Coaching- Accounts Cost FM) (735 Points)
Replied 05 December 2009

conceptually directors approve the accounts and then auditor makes his report on the approved accounts. the date of audit report and the date of sign of director may be the same date or the date of the audit report may be at later date.because the auditor shall have to make his report on the acounts which have been approved by the board.

Ansari (ca final) (444 Points)
Replied 06 December 2009

Originally posted by :sudipto sinha
"	conceptually directors approve the accounts and then auditor makes his report on the approved accounts. the date of audit report and the date of sign of director may be the same date or the date of the audit report may be at later date.because the auditor shall have to make his report on the acounts which have been approved by the board.	"

CA.SKR (CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional) (442 Points)
Replied 06 December 2009

Originally posted by :CA. Rashi Goyal
"	Hi, Is there any violation, if directors sign the audited financial statements on different dates and on different places.	"

The pre-audited financial statements are to be adopted by the Board in a duly convened Board meeting and to be signed by the directors present & authorised in the board resolution. Thereafter, pre-audited financial statements are submitted to Auditors for their signatures and audit report, which alongwith Director's Report is adopted in the Board meeting.

Keeping in view the above, only the directors present in the board meeting can sign the audited financial statements. Hence, in my opinion, signing of audited financial statements on different dates and on different places by directors is not correct.

CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 17 December 2009

Thanks, can you please provide the reference of the relevant section. As per section 215 if the companies Act, it is not necessary to get the financials signed in duly convened meeting. Please suggest.

CA.SKR (CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional) (442 Points)
Replied 18 December 2009

The provisions of Section-215 are reproduced below for better understanding.

Section 215

AUTHENTICATION OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

(1) Save as provided by sub-section (2), every balance sheet and every profit and loss account of a company shall be signed on behalf of the Board of directors

(i) in the ase of a banking company, by the persons specified in clause (a) or clause (b), as the case may be, of sub-section (2) of section 29 of the Banking Companies Act, 1949 (10 of 1949);

(ii) in the case of any other company, by its manager or secretary, if any, and by not less than two directors of the company one of whom shall be a managing director where there is one.

(2) In the case of a company not being a banking company, when only one of its directors is for the time being in India, the balance sheet and the profit and loss account shall be signed by such director; but in such a case there shall be attached to the balance sheet and the profit and loss account a statement signed by him explaining the reason for non-compliance with the provisions of sub-section (1).

(3) The balance sheet and the profit and loss account shall be approved by the Board of directors before they are signed on behalf of the Board in accordance with the provisions of this section and before they are submitted to the auditors for their report thereon.

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As per Sec-215 (3), BS and P&L A/c are to be signed by directors only after approval / adoption of the same by Board but before they are submitted to the auditors for their report thereon. Since adoption of BS and P&L A/c as well as Annual Report (inclusive of Auditor's Report) are to be done in the same board meeting, hence only directors present in that board meeting have to sign BS and P&L A/c.

Hope this clarifies your query. If not, please go through the above provisions of Sec-215 again and again.

Thanks

Manoranjan (ACS) (30 Points)
Replied 20 July 2017

Hi, what will be the signing date by a CS on financial statements if the financials are approved in a board meeting which is held outside india and CS is signing financials in India ? Kindly offer your expertise.

Lakshminaarayanan S (NIl) (22 Points)
Replied 28 July 2017

My point of view . Actually Board meeting need to be conducted by Company secretary (CS). So on behalf of company CS is evidence signature that "FS is approved in that Board meeting only" . So legally is not correct CS not attending the BM and signing the FS.

Arif Ali (Apt Co Advisory) (1230 Points)
Replied 02 December 2017

Balance Sheet first signed by Board of Directors and then audited by Auditor. On Balance Sheet only place and date of Auditor signature is mentioned. My query is that if Board of Directors signs at other place and date, then Auditor sign the Balance Sheet on other place and date, then why we mention only Auditor place and date on Balance Sheet, why we does not mention the Board of Directors Place and date?