Law:

Section:

Companies Ordinance (XLVII of 1984)------- --------Ss. 255, 260 & 476-------Audit of Annual Financial Statement of the company-------Issuing unqualified audited report contrary to the provisions of "Accounting and Financial Reporting Standard ("AFRS")-------Auditor, audited the Annual Financial Statements of the company and issued an unqualified audit report, by not complying with the provisions of "Accounting and Financial Reporting Standards" ("AFRS")-------Auditor also failed to perform the audit as per the standard and guidelines provided in International Standards on Auditing (ISAs)-------Commission dissatisfied with the submission of the Auditor held that auditor had failed to comply with the provisions of S. 255(3) of the Companies Ordinance, 1984 which attracted penal provisions of S.260 of the Ordinance-------Keeping in view the assurance given by the Auditor that the default would not recur in future, a token penalty of Rs.7,000 was imposed on the Auditor-------Validity-------Auditors, being the ultimate watchdog of the shareholders' interest, were required to give a report on the financial statements and books of account after conducting the audit in accordance with the prescribed procedure and requirements of Companies Ordinance, 1984 and International Accounting and Auditing Standards-------If any misstatement/omission was found, which had a material impact on the financial statements, the Auditor was required to issue a modified report-------In the present case, Auditor had admitted his mistake that he had not identified the title of "Statement of charges in funds" due to a clerical mistake on part of their staff, and consequently submitted a revised report to the company-------Revised report was required to be submitted as per the guidelines outlined in International Standards on Auditing, which had not been complied with by the Auditor-------Fact that the company had acknowledged the revised report, had no bearing on the Auditor, and would not relieve the Auditor of his statutory responsibility to follow the guidelines and requirements of International Standards on Accounting-------Auditor having failed to give an audit report in accordance…

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