9911796707
|
Home
Issues:
Interpretation of auditors' duty under Section 134 of the Companies Act, 1929 in relation to making reports to members. Determining the responsibility of auditors in presenting balance-sheets and ensuring their accuracy. Analysis of the duty of auditors in communicating with shareholders, specifically in general meetings. Evaluation of the liability of auditors for not directly sending reports to all members of the company. Interpretation of Auditors' Duty: The judgment delves into the auditors' duty as outlined in Section 134 of the Companies Act, 1929. The court examines whether the auditors are obligated to make reports to every member of the company or solely to members assembled in general meetings. The judge concludes that the duty of auditors is to forward their report to the secretary of the company, leaving it to the directors or the secretary to convene a general meeting for report consideration. This interpretation limits the meaning of "the members" to those assembled in general meetings, not all members individually. Responsibility for Balance-Sheets Accuracy: The judgment emphasizes the distinct responsibilities of directors and auditors concerning balance-sheets. It highlights that while directors are responsible for presenting the balance-sheet, auditors are tasked with ensuring its accuracy. The auditors' duty is to attest to the correctness of the balance-sheet as a final account, and they are not accountable for delays in its preparation by the directors. The court references relevant legal provisions and precedents to underscore the auditors' role in verifying the financial state of the company. Auditors' Communication with Shareholders: The judgment scrutinizes the methods through which auditors can communicate with shareholders, particularly in general meetings. It discusses the statutory requirement for auditors to make reports to members assembled in general meetings. The court deliberates on whether auditors must personally present the report in such meetings or if forwarding it to the company's secretary suffices. It concludes that the duty of auditors is fulfilled by sending the report to the secretary, as they lack the authority to convene general meetings themselves. Liability of Auditors for Report Distribution: The judgment addresses the liability of auditors for not directly sending reports to all members of the company. It explores the practical challenges auditors face in disseminating reports to every member individually and asserts that the duty of auditors is discharged by sending the report to the company's secretary. The court underscores that shareholders have rights to ensure directors fulfill their obligations, including convening meetings and presenting reports, ultimately safeguarding shareholder interests. In summary, the judgment clarifies the nuanced duties of auditors in relation to balance-sheet accuracy, communication with shareholders, and the practicalities of report distribution, providing insights into the legal framework governing auditors' responsibilities under the Companies Act, 1929.
|
