Auditor’s Report :
The auditor shall make a report to the members of the company on the accounts and financial statements examined by him after taking into account the provisions of the Companies Act, the accounting standards and auditing standards. The report shall be laid before the company in general meeting.

1. The auditor shall state in his report that to the best of his information and knowledge, the accounts and financial statements give a true and fair view of the state of the company’s affairs as at the end of its financial year and profit or loss and cash flow for the year.

The auditor shall comply with the auditing standards and sign the auditor’s report of the company. The auditor’s report shall also state following –

(a) whether he has sought and obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his audit and if not, the details thereof and the effect of such information on the financial statements;

(b) whether, in his opinion, proper books of account as required by law have been kept by the company so far as appears from his examination of those books and proper returns adequate for the purposes of his audit have been received from branches not visited by him;

(c) whether the report on the accounts of any branch office of the company audited by a person other than the company’s auditor has been sent to him under and the manner in which he has dealt with it in preparing his report;

(d) whether the company’s balance sheet and profit and loss account dealt with in the report are in agreement with the books of account and returns;

(e) whether, in his opinion, the financial statements comply with the accounting standards;

(f) the observations or comments of the auditors on financial transactions or matters which have any adverse effect on the functioning of the company;

(g) whether any director is disqualified from being appointed as a director

(h) any qualification, reservation or adverse remark relating to the maintenance of accounts and other matters connected therewith;

2. If any of the matters required to be included in the audit report is answered in the negative or with a qualification, the report shall also state the reasons for the same.

3. The qualifications, observations or comments on financial transactions or matters, which have any adverse effect on the functioning of the company mentioned in the auditor’s report shall be read before the company by the auditor in general meeting and shall be open to inspection by any member of the company.

4. As per the Companies (Auditor’s Report) Order, 2015, an auditor should include a statement on the following matters in the auditor’s report on the account of companies covered under this order-

(i) Fixed assets
(ii) Inventory
(iii) Granting of loans to certain parties
(iv) Internal control system
(v) Acceptance of deposits
(vi) Maintenance of cost records
(vii) Deposit of statutory dues
(viii) Accumulated Losses and Cash Losses
(ix) Default in repayment of dues
(x) Guarantee for loans taken by others from bank or financial institutions
(xi) Application of term loans
(xii) Fraud Reporting