Professional Documents
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A PROJECT
ON
Project Report on Company Audit of Tirtharoop Electricals Pvt. Ltd
In the subject Advance Auditing
SUBMITTED TO
UNIVERSITY OF MUMBAI
FOR SEMESTER-IV OF
MASTER OF COMMERCE
BY
SUNITA KUMARI YADAV
MCOM PART-II AND ROLL NO- 3601
UNDER THE GUIDANCE OF
MR. GAJANAN WADER
YEAR- 2013-2014
Signature of Student
EVALUATION CERTIFICATE
This is to certify that the undersigned have assessed and evaluated the project on
Project Report on Company Audit of Tirtharoop Electricals Pvt. Ltd
Submitted by SUNITA KUMARI YADAV Student of M COM Part-II.
This project is original to the best of our knowledge and has been accepted for internal
assessment.
Internal Examiner
External Examiner
vice Principle
Class
Division
Roll
Number.
M COM
PART II
3601
Mark Awarded
DOCUMENTATION
Internal Examiner
(Out of 10 Marks)
External Examiner
(Out of 10 Marks)
Presentation
(Out of 10 Marks)
Viva and Interaction
(Out of 10 Marks)
Signature
CHAPTER NO.
TOPIC
PAGE
NO.
1.
Introduction
2.
Feature Of Company
3.
4.
5.
6.
7.
11
8.
14
9.
19
10.
21
11.
24
13.
27
14.
Conclusion
31
12.
25
Meaning of Company
Section 3 (1) (i) of the Companies Act, 1956 defines a company as a company formed
and registered under this Act or an existing company. Section 3(1) (ii) Of the act states
that an existing company means a company formed and registered under any of the
previous companies laws. This definition does not reveal the distinctive characteristics
of a company . According to Chief Justice Marshall of USA, A company is a person,
artificial, invisible, intangible, and existing only in the contemplation of the law. Being a
mere creature of law, it possesses only those properties which the character of its
creation of its creation confers upon it either expressly or as incidental to its very
existence.
Another comprehensive and clear definition of a company is given by Lord Justice
Lindley, A company is meant an association of many persons who contribute money or
moneys worth to a common stock and employs it in some trade or business, and who
share the profit and loss (as the case may be) arising there from. The proportion of
capital to which each member is entitled is his share. Shares are always transferable
although the right to transfer them is often more or less restricted.
For forming a public company at least seven persons and for a private company at
least two persons are persons are required. These persons will subscribe their
names to the Memorandum of association and also comply with other legal
requirements of the Act in respect of registration to form and incorporate a company,
with or without limited liability [Sec 12 (1)].
But for many purposes, a company is a legal person like a natural person. It has the
right to acquire and dispose of the property, to enter into contract with third parties in
its own name, and can sue and be sued in its own name.
However, it is not a citizen as it cannot enjoy the rights under the Constitution of
India or Citizenship Act. In State Trading Corporation of India v C.T.O (1963 SCJ
705), it was held that neither the provisions of the Constitution nor the Citizenship
6. Limited Liability :
A company may be company limited by shares or a company limited by guarantee.
In company limited by shares, the liability of members is limited to the unpaid value
of the shares. For example, if the face value of a share in a company is Rs. 10 and a
member has already paid Rs. 7 per share, he can be called upon to pay not more
than Rs. 3 per share during the lifetime of the company. In a company limited by
guarantee the liability of members is limited to such amount as the member may
undertake to contribute to the assets of the company in the event of its being wound
up.
8. Separate Property :
As a company is a legal person distinct from its members, it is capable of owning,
enjoying and disposing of property in its own name. Although its capital and assets
are contributed by its shareholders, they are not the private and joint owners of its
property. The company is the real person in which all its property is vested and by
which it is controlled, managed and disposed of.
Audit Report
An auditor, under Section 227 (2) of the Companies Act, 1956, is required to make a
report to the shareholders of the company whether the books of accounts examined by
him exhibit true and fair view of the state of affairs of the business.
The auditor submits his report to his client giving clear and concise information of the
result of audit performed by him. The fact or information contained in the auditor's report
is not available from any other source.
The statutory auditor of a company has to express his professional opinion about the
truth and fairness of the state of affairs of the company as shown by the Balance Sheet
and of the profit or loss as shown by the Profit and Loss Account in addition to other
information in his report.
Typically, an unqualified report consists of a title that includes the word independent.
This is done to illustrate that it was prepared by an unbiased third party. The title is
followed by the main body. Made up of three paragraphs, the main body highlights the
responsibilities of the auditor, the purpose of the audit and the auditors findings. The
auditor signs and dates the document, including his address.
2. Qualified Opinion
In situations when a companys financial records have not been maintained in
accordance with GAAP but no misrepresentations are identified, an auditor will issue a
qualified opinion. The writing of a qualified opinion is extremely similar to that of an
unqualified opinion. A qualified opinion, however, will include an additional paragraph
that highlights the reason why the audit report is not unqualified.
3. Adverse Opinion
The worst type of financial report that can be issued to a business is an adverse
opinion. This indicates that the firms financial records do not conform to GAAP. In
addition, the financial records provided by the business have been grossly
misrepresented. Although this may occur by error, it is often an indication of fraud.
When this type of report is issued, a company must correct its financial statement and
have it re-audited, as investors, lenders and other requesting parties will generally not
accept it.
4. Disclaimer of Opinion
On some occasions, an auditor is unable to complete an accurate audit report. This may
occur for a variety of reasons, such as an absence of appropriate financial records.
When this happens, the auditor issues a disclaimer of opinion, stating that an opinion of
the firms financial status could not be determined.
Being the Second Generation entrepreneur; Mr. Sachin Subhash Gokhale (Director)
son of Mr. Subhas Gokhale, aged 33 years holds a bachelor degree of Commerce and
Diploma in Electrical Engineering from DIESE, Pune. He is qualified Engineer with more
than 10 years of qualitative experience. He has proven track record of undertaking
valued engineering initiatives, establishing new set-ups, streamlining operations,
evolving cost reduction mechanism, producing engineering techniques and creating a
team work environment to enhance productivity with new initiatives and innovations
within the organizations. He is a dynamic young and enterprising youth with effective
communication skills with great presentation skills. He has the ability to convert adverse
business environment to a favorable business affair.
Mr. Vinay Dattatraya Bhave designated as (Head Sales) aged 49 years, residing at
Flat 201, Kanak Residency, Plot No. 54, MCHS, Near Purohit Hospital, Old Panvel,
Dist. Raigad, Maharashtra-410206. He is a BTech.(Elec.) and holds Diploma in
Electrical Engineering from C.W.I.T., Pune . He is a qualified Engineer with more than
25 years of qualitative experience in industries like Orkay Polyester, Hikal etc. Expert at
planning and effecting preventive maintenance schedules of various machineries to
increase machine up time and equipment reliability. He is related to various Social
service organizations and is a Founder committee member of Friends of children
organization, a NGO working for poor students. A Member of Managing Committee of
Pen taluka Maternity & Children Welfare Center, a Charitable Hospital providing Medical
Assistance to Poor & Needy people. He is one of the Founder Managing committee
Member of Sobatee a NGO working for Betterment, Awareness, Education,
Environment, Medical Assistance etc for more than 6 years. He is highly influential with
regards to his contacts relating social welfare cause.
Mr. Vinit Vinayak Joshi designated as (Head - Admin & Logistic) aged 33 years is a
resident of At & Post Palaspe, Tal. Panvel, Dist. Raigad
Maharashtra-410206.
Process re-engineering.
Material Management.
Cost reduction.
Y/N
AS 2 Valuation of Inventories
AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Y
Accounting Policies
AS 6 Depreciation Accounting
AS 9 Revenue Recognition
AS
10
AS
13
AS
14
AS
15
Employee Benefits
AS
16
Borrowing Costs
AS
18
AS
20
AS
22
AS
26
Intangible Assets
Debtor ledger: These ledger accounts of customers are opened to whom trader has sold the goods, so its
other name is also sale account ledger. Because all credit sales amount can be checked from
the amount due from debtors in this ledger. It is also one place where we can find each
debtors closing balance.
The objectives of studying audit of debtors ledger is 1. To know about ledger (debtors).
2. To verify that there are no errors and frauds in this ledger.
3. To confirm that company has prepared debtors ledger without any errors and frauds and it
is doubt free ledger.
It is broad in its applicability as it covers all short-term and long term employee benefits. For
example, annual paid leave (though not en cashable), long-term service rewards, subsidised
goods or services, etc. are also covered.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our Audit opinion.
CONCLUSION
6. In our opinion, and to the best of our information and according to the explanations
given to us, the financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a) project
in the case
of the Balance
Sheet,
the state of and
affairs
of the company
as at 31st the
The
concluded
that, given
theofcomplexity
development
of Company,
March, 2013; and
(b) in the case of Statement of Profit and Loss, of the Profit for the year ended on that
overall
date.level of compliances with the standards and codes is of high order. This project
gives the correct ideas about how the major areas can be found by way of effective
Report on Other Legal and Regulatory Requirements:
auditing system i.e. errors, frauds, manipulations etc. form this auditor get the clear idea
7. As required
by section
227(3)
of the Project
Act, wealso
report
that: that how to conduct of audit of
show
to recommend
on the
position.
contain
a. We havewhat
obtained
all various
the information
andthrough
explanations
best of our
the company,
are the
procedure
whichwhich
audittoofthe
company
should
knowledge and belief were necessary for the purpose of the audit.
be done. Form auditing point of view, there is proper follow up of work done in every
b. In our opinion, proper books of account as required by law have been kept by the
company so far as appears from our examination of those books.
organization there no misconduct of transactions is taken places for that purpose the
c. The
Sheet and
Statement
of Profit
and Loss
with byand
thispoint
report
in
auditing
is Balance
very important
aspect
in todays
scenario
formdealt
company
ofare
view.
agreement with the books of account;
d. In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the
Accounting Standards referred to in sub section (3C) of section 211 of the Companies
Act, 1956;
e. On the basis of written representations received from the directors as on 31st March,
2013 and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2013 from being appointed as a director in terms of
clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f. Since the Central Government has not issued any notification as to the rate at which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued
any Rules under the said section, prescribing the manner in which such cess is to be
paid, no cess is due and payable by the Company.
For XXX
CHARTERED ACCOUNTANTS
Place : Mumbai
Date : 31/08/2013
MR. A
(Proprietor)
Membership No. 132564