Page 306 - DCOM204_AUDITING_THEORY

Auditing Theory

Notes At present, the Companies Act contains provisions relating to maintenance of Cost Records
under section 209 (1) (d) and Cost Audit under section 233B of the Companies Act in
respect of specified industries.
The Committee felt that the provisions in the present Act requiring Special Audit under
certain circumstances were not relevant in view of the detailed investigation provisions
recommended by the Committee.

14.5 Keywords

A Government Company is defined in Section 617 as “any company in which not less than 51 per
cent of paid-up share capital is held by the Central Government or by any State Government or
Governments or partly by the Central Government and partly by one or more State Governments
and includes a company which is a subsidiary of a Governments Company as thus defined.”
Audit Committee: The Companies (Amendment) Act (2000), among other things, provides for
the formation and functioning of audit committees (section 292A). Similar requirements for
audit committees are prescribed under clause 49 of the Listing Agreement issued by SEBI.
Partnership Deed: A document setting out the agreement of the partners on how the partnership
is to be conducted (including the arrangements for sharing profits and losses.
Partnership, partner, firm and firm name - “Partnership” is the relation between persons who
have agreed to share the profits of business carried on by all or any to them acting for all.

14.6 Review Questions

1. What do you understand by audit of partnership accounts? Describe various features of a
partnership account.
2. Describe procedure for appointment of auditor by individual partners.

3. What the key features of a government company.
4. Describe in detail the audit procedure of a government company.
5. What the roles and responsibilities of an Audit Committee?

6. What are the various special provisions of the Companies Act relating to Government
Companies as regard to audit?
7. What are the powers of auditor of a holding company?

8. What do you understand by authentication, circulation and revision of financial statements?
Answers: Self Assessment

1. True
2. False
3. True
4. True
5. a key audit partner
6. drawings
7. comptroller and auditor general of India

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