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Rights and Duties of an auditor

 Rights of an Auditor

  1. Right to Access books of accounts: Every auditor of a company has right to free and complete access at all the times to the books, accounts and vouchers of the company
  2. Right to obtain the information and explanation: An auditor is authorized to obtain such information and explanation as the auditor may think necessary for the performance of his duty as auditor.
  3. Right to receive notice: All notices of the company and other communications relating to any general meeting of the company shall be forwarded to the auditor of the company. He is also authorized to attend the meetings and make any statement or explanation with regarding the accounts audited by him.
  4. Right to sign audit report: only the person appointed as auditor of the company, where a firm so appointed only a partner in the firm practicing in India, may sign the auditor’s report or authenticate any other document of the company required law to be signed or authenticated by auditor.
  5. Right to seek legal and technical advice: The auditor of a company is entitled to seek the legal and technical advice which may be needed in the performance of his duties.
  6. Right to remuneration: on completion of his work an auditor is entitled to his remuneration.
  7. Right to be indemnified: for many purposes, an auditor is considered to be an officer the company. An officer has a right to be indemnified out of the assets of the company against any liability.

Duties of an Auditor:

Duties under section 143 (1):

  1. The auditor has a duty to enquire whether loans and advances made by the company have been properly secured whether the term and the conditions there of are prejudicial to the interest of the company or its members.
  2. Duty to enquire whether assets of the company being shares or debentures and other securities have been sold at a price less than at which these were purchased.
  3. Whether any shares have been allotted for cash, whether cash actually received and whether the position in the account books and balance sheet is correct, regular and not misleading.

Duties under section 143 (2):


The auditor has the duty to report the members of the company, the accounts examined

by him and every financial statement to be laid before the company in the general meeting. The

auditor shall state in his report to the best of his information and knowledge, the said accounts and financial statements whether give a true and fair view or not, of the state of company’s affairs.


Duties under section 143(3):

  1. He has the duty to sought and obtain all information and explanation which are necessary for his audit.
  2. He has a duty to ensure that the books of accounts as required by law have been kept by the company.
  3. He has a duty to see whether the company has adequate internal financial control systems in place and their operative effectiveness.
  4. He has a duty to ensure whether the company’s balance sheet and profit and loss account dealt within the report or in agreement with the books of account and returns.






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