Law: Companies Ordinance, 1984

Section: 252

Companies Ordinance (XLVII of 1984)--Ss. 252, 255, 260 & 476---Powers and duties of auditors---Preparing and submitting defective audit report---Non-compliance of mandatory provisions of law---Imposition of penalty---Auditors appointed to conduct account of the company, submitted audit report otherwise than in conformity with the requirements of S.255 of Companies Ordinance, 1984---Enforcement Department of the Commission while examining the audited accounts of the company for the relevant year and auditors' report thereon observed that the company had not complied with provisions of Ss. 234 & 235 of Companies Ordinance, 1984 and that audit report submitted by auditors was full of defaults-Auditors being the ultimate watchdog of the shareholders interest, were required to give a report on the accounts and books of accounts after conducting audit in accordance with prescribed procedure and requirements of Companies Ordinance, 1984 and International Accounting and Auditing Standards---Shareholders were the ultimate entity to whom the auditors were responsible and they must keep that fact in mind while auditing the books of accounts and reporting thereon---Was extremely important for the auditors to be vigilant and perform their duties and obligations with due care while auditing the accounts and books of accounts---Lapses and non-compliance of mandatory provisions of law on the part of auditors could not be taken lightly---Audit report having been made otherwise than in conformity with requirements of S.255 of Companies Ordinance, 1984, representation of auditors who had signed that report had made him liable for punishment under subsection (1) of S.260. of the Ordinance---Accounts of the company in subsequent years having been rectified, instead of imposing maximum fine of Rs.100,000, a fine of Rs.20,000 was imposed on engagement partner of auditing company who had also assumed the sole responsibility of the audit of the company and no fine was imposed on other Auditors. ORDER ASHFAQ AHMED KHAN, DIRECTOR (ENFORCEMENT).---This order shall dispose of the proceedings initiated against M/s Mansha Mohsin Dossani Khan & Company, Chartered Accountants…

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