Law: Companies Ordinance, 1984

Section: 233,253(3), 255(3)(6), 476 & 498

Companies Ordinance (XLVII of 1984)-------Ss.253(3), 255(3)(6), 476 & 498---Failure to submit signed audit report---Imposition of penalty---Record of the Commission had revealed that company had submitted annual accounts in compliance with S.233 of Companies Ordinance, 1984---Said; accounts had revealed that accounts were signed by the Chief Executive and the Director of the Company but audit report attached with the accounts was not signed by the Auditor, but was initialed by him---Auditor was aware of the fact that company was presenting the accounts in the annual general meeting which were -not authorized by hire---Despite the said knowledge Auditor had failed to make representation in said annual general meeting and bring the fact to the knowledge off share-holders and regulatory authorities---Show-cause notice was issued to the Auditor in which 14 days time was. given to respond to said show-cause notice, but same was replied with a. delay of two months---Arguments put forward by the Auditor in response to show-cause notice were not tenable---Auditors being the ultimate watchdog of the share-holders' interest, were required to give a report on the accounts and books of account after conducting the audit in accordance with the prescribed procedure and requirements of Companies Ordinance, 1984 and standards---If auditors found any irregularity, they were required to issue a modified report, if said irregularity was material to the accounts, otherwise they would issue a clear report to the share-holders, who were the ultimate entity to whom the Auditors were responsible-- Auditors were also responsible to report to the members and the regulatory authorities of any irregularity noticed during the audit---Auditors .should be vigilant in performing their duties with. due care---Chartered Accountants/Auditors had not signed the annual accounts of the company for the relevant year, which the company had presented in annual general meeting and got approved from the shareholders-- Auditors however, having reported said fact to the Commission subsequently, taking lenient view, instead of imposing a maximum penalty of Rs.50,000 under S.498 of the Companies…