Appointment of internal auditors are not a mandatory clause for all the companies, moreover the word used in Companies
(Auditor’s Report) Order, 2003 is "Proper Internal Control System" not "Internal Audit".
Now the big questions are which companies needs to appoint internal auditors under which clause and what is the procedure????
As
per the provisions of Companies (Auditor’s Report) Order, 2003 every public
company irrespective of its paid – up capital or nominal capital shall have a
proper internal control system. To have this proper internal control systems
normal practice is to appoint internal auditors. There is nothing defined in
the order that what shall be the criteria/procedure/ qualification for
appointment of internal auditor.
The
common practice is to appoint a chartered accountant or a chartered accountants
firm depending upon the size of the firm. The appointment could be done by
issuing an appointment letter or by approving the said appointment in the
meeting of the board of directors by passing a board resolution.
The
Company may sign a contract in the same manner as being signed for appointment
of statutory auditors of the Company.
Draft
of board resolution for appointment of internal auditor:-
“RESOLVED THAT consent of the
board of directors of the Company be and is hereby given for the appointment of
M/s __________, Chartered Accountants, as Internal Auditor of the company for
the F.Y. -----at a remuneration of Rs. ----.”
For any further question on this subject you may contact me at: nikita.1.singh@gmail.com
- The information given in this blog is the personal understanding of the writer and shall not be used as a conclusive material. The content stated/mentioned here is subject to changes by respective government/authorities in the applicable laws. The writer shall not be liable for any direct or indirect damages caused to any person acting solely on/based upon the information provided herein.
It is really a great work and the way in which you are sharing the knowledge is excellent. Thanks for your informative articletax consultancy in dubai
ReplyDeleteI am reading your post from the beginning, it was so interesting to read & I feel thanks to you for posting such a good blog, keep updates regularly.patent search in india
ReplyDelete