If any applicable accounting touchstone is not followed
1)Auditor is bound by Sec 227 (3) (d) to undo such non-compliance.
2)Director to state such non compliance in director’s report u/s 217 (2AA).
3) guild is bound to disclose fact of such deviation and its monetary ensnare u/s 211 (3) (b).
Consequences
On Auditor
1)Auditor or any new(prenominal) person who signs the report or signs or au thuslyticates the document, shall, if the default is willful, be punishable with fine which may contain to ten thousand u/s 233 of The Companies Act 1956.
2)Further, shareholder lawsuits could be brought against the audit firm for failure to exercise imputable care. In addition, disciplinary proceedings/enquiries could be initiated by the comprise of Chartered Accountants of India against the audit firm, which would be a very dear implication for the audit firm, as it could have the immediate effect of disqualifying their eligibility to act as statutory auditors for several banks and former(a) institutions. Such an event could also result in break of serve or debarment of the audit firm if the ICAI concludes that there were serious lapses on the audit firm’s part.
On Director
1)Punishments for violations of arm 217 (6) of the Companies Act, are a maximum of Rs 20,000, or maximum custody of six months. Plus, it must be proved that the offence was wil in force(p)y committed.
On Company
Basically as per Sec 209 (6) of The Companies Act 1956 by-line persons are responsible for maintenance of accounts & disclosing the deviation from accounting type
a)In case company has Managing director or manager, then such M.D, Manager and concerned employees
b)In any other case, every director of the company.
As per Section 211 (7) & 211 (8) of The Companies Act 1956 in case the person fails to report such deviation willfully
“He shall, in respect of each offence, be punishable with bonds for a term which may...If you want to get a full essay, order it on our website: Orderessay
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