1.45     Query

Audit of Accounts Based on Duplicate Set of Books.

Books of a private limited company for the year 1972-73 have been taken away by the CBI authorities for an inquiry on a complaint by the labourers.  The company had submitted annual returns u/s 259 of the Companies Act, 1956 without audited statements.  The Income-tax returns were also filed and assessments have been completed.

The cash book and ledger were copied from the books lying with investigating authorities from which the statements for the year 1972-73 were prepared.

 Whether audit for 1972-73 can be completed, with remarks in the Auditor’s report, from the copies of the duplicate set of books, or only audit for 1973-74 onwards can be completed with remarks in the Auditor’s report.

                                                                         Opinion                                      January 16, 1978

   In the opinion of the Committee it should be open for the Auditor to complete the audit of the accounts based on such duplicate books.  What an auditor is expected to state is whether the relevant Balance Sheet and Profit & Loss Account as certified by him are in accordance with books of accounts examined by him.  The books of accounts examined by him in this case would be the duplicate set of cash books.  If, therefore, the auditor audits such sets of books duly supported by the original vouchers and other documents in respect of the entries appearing therein and he is satisfied with the correctness thereof, there should not be any objection on his part in certifying the correctness of the accounts.  The Auditor should bring out the facts in his report to members with regard to limitation on his audit.

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