The auditor of a Partnership Firm:
Appointment:
The auditor of a partnership firm is appointed by the partners on mutual agreement. Such an agreement between him and the partners can also be affected by the provisions of the Partnership Deed, if any.
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ADVERTISEMENTS:
Remuneration:
The remuneration of the auditor is also decided by the agreement.
Rights:
ADVERTISEMENTS:
There is no statutory right for the auditors. However, he can be granted the following rights:
(1) He has a right to examine the Partnership Deed.
(2) He has a right to have access to the books of accounts and to check them.
(3) He has a right to obtain information and explanations from the firm.
ADVERTISEMENTS:
Duties:
The auditor, generally, has the following duties:
(1) Before commencing his work, the auditor should obtain clear instructions in regard to his duties, study the Partnership Deed and the Indian Partnership Act, 1932, obtain a list of books used in the business and of persons dealing with them, examine the internal check system and go through the technical details of the business.
(2) He should work sincerely and honestly.
(3) He should make a report after his work is over.
(4) If he is asked to give some suggestions to improve the working of the business, he should do so. It is rather his moral duty to give suggestions.
The audit of partnership accounts is not compulsory under the Partnership Act, 1932 which does not specify the powers, duties and liabilities of an auditor. The scope of his work and responsibilities are determined by the terms and nature of his appointment. However, he is required to report to the partners at the end of his work.
Thus, whatever is the nature of his work or scope of his responsibilities, he is always liable for negligence of duty under the common law, supported by the Contract Act and the Law of Agency.