ISSUE:
Whether the defendants failed or neglected to apply their minds to or enquire into ascertaining the facts?
Whether the correct figures for sales, etc., have been set out or not?
Whether the publication of the report for the year ended August 31, 1974, caused and setback to the credibility, prestige, or goodwill of the plaintiffs?
Whether the said alleged manipulations, frauds, etc., could have been discovered by the defendants had they carried out their duties as auditors with reasonable diligence?
Whether the defendants failed and neglected to carry out their audit by accepted principles of accounting?
Whether the plaintiffs have suffered the damages?
Whether the defendants are liable to compensate the plaintiffs for the said alleged damages?
RULE:
The auditors play a critical function in overseeing the employer’s economic topics. As consistent with Section 141 of the Companies Act, 2013 only chattered accountants can be auditors. Section 143 tells that the auditor of a company shall have the right of entry to the books of money owed by the agency laws.
The duty of the auditor does not in any way absolve the management of its responsibilities and duties. While the Auditor expresses their opinion on the financial statements, it is the task of the Management to prepare them. The role of the Auditor requires them to procure knowledge of their client’s accounts, and the knowledge of the internal controls in place however he is not to delve into the mechanism behind such internal control, that is solely the responsibility of the Management.