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Criminal Liabilities Of An Auditor

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Dec 13th, 2011
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CRIMINAL LIABILITIES of Auditors
Since for certain purpose of the companies Act, and auditor is deemed to be an officer of the company, he is a liable for such. Act of omission or commission constituting offence under the Act.

6. MISSTATEMENT IN PROSPECTUS {SEC. 63}
Here a prospectus containing any untrue or misstatement is issued with the consent of auditor who shall be punished the with imprisonment which may extend up to two years or with fine which may extend up to Rs.5000/- or both.

7. REQUIREMENTS OF REPORTS {SEC. 225}
Here the auditor does not confirm to the requirements of reports as per sec.229 he shall be punished with fine, which may extend up to Rs.l000/-

8. ASSISTANT TO INVESTIGATE {SEC.24O}
Auditor has statutory duty to assist any investigator appointed by the central Government in collecting any information of the company otherwise he shall be punished with imprisonment which may extend up to six month or with a fine up to Rs.2000/- or both For continuous default, Rs.200/- per day may also be charged.

9. ASSISTANCE TO PROSPECTUS {SEC.242}
On the basis of report of an inspector control Government may prosecute any officer. Auditor is to assist in such prosecution otherwise he is to be punished for contempt of court.

10. RETURN BOOKS, PAPERS PROPERTY ETC. {SEC.477}
At the time of winding up of a company, court may ask the auditor returning any property, hooks or papers of the company otherwise he can be arrested.

11. PUBLIC EXAMINATION {SEC.478}
On the report of official liquidation, the audition of the companies to the publicly examined, Notes of such examination shall be used as evidence in any civil or criminal proceeding against the auditor.

12. FALSIFICATION OF BOOKS OF ACCOUNTS {SEC.539}
Where the auditor is guilty of destruction, mutilation, alteration, falsification of any book, paper, securities, he shall be imprisoned which may extend up to 7 years and shall also be liable to fine.

13. PROSECUTION OF AUDITOR {SEC.545}
Where auditor is found be guilty of any criminal offence by the liquidator of the company, he shall be prosecuted.

14. FALSE STATEMENT IN ANY RETURN:
Where the auditor makes any false statements in any material respect in any return report, certification, balance sheet etc. he shall be imprisoned which may extend up to 2 year and shall also be liable to fine.

15. DIS AUDITOR {254(6)}
The company ordinance has clearly stated the persons who are not qualified as auditor, but if an unqualified auditor may act as auditor of the company. He is liable to fine up to 5000/- rupees.

16. NON-COMPLIANCE {SEC. 260}
In case when the auditor makes any report or signed against the legal requirement and the report may be not true the auditor is liable to fine for Rupees 2000/- if it is willful fault.

17. AUDITOR REPORT:
If the auditor make the report with the extent to profit himself and the third party for any loss for a material consideration it is a criminal liability He may be punished for Six months and fine up to 2000/- rupees.

18. ASSIST INSPECTOR {SECTION. 268}
The auditor has to give all the necessary assistance in connection with investigation to the inspector. Some times the auditor may fail to give it. In this case lie shall be punishable up to one year and fixed up to ten thousand rupees.

19. AUDITOR ACCOUNT {SEC. 384(4)}
The Auditor is liable to submit his report after or within he two months at the end of the period to which account relates. If he fails there is a fine up to rupees 5000/-

20. FALSE EVIDENCE {419}
If any person provides false evidence lie is punishable up to two years and liable for fine also. The evidence may be affidavit, oath or some affirmation etc.

21. WINDING UP {SEC.42O}
“The criminal liability f company officers including auditor may be imposed may year before or during liquidation of company for criminal offences like concealing or removing property, concealing or falsifying document and papers. The liquidation can go to the court of law for proving t he breach of duty.

22. FALSE STATEMENT {SEC.492}
Whoever makes a statement false or incorrect or omits any material fact shall be punishable with imprisonment for a term, which may extend to three year and shall be liable to a fine not exceeding twenty thousand rupees.

23. PAKISTAN PENAL CODE {SEC197}
Whoever makes a statement false or incorrect or omits any material fact shall be punishable with imprisonment for a term, which may extend to three year and shall be liable to a fine not exceeding twenty thousand rupees.

24. PROFESSIONAL MISCONDUCT
If the auditor fails to follow the rules of their own profession is liable for the criminal liability. For this default the council call with draw the certificate of practice. The council can also go to the court of law for prosecuting the concerned auditor. The auditor can suffer the jail or fine or both.

 


Article Source: http://www.informationbible.com/article-criminal-liabilities-of-an-auditor-144598.html

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