ATR-8(Reformatted
2002)
PREPARATION
OF ACCOUNTS FROM INCOMPLETE RECORDS AND REPORT THEREON AS AUDITORS
The
Issue
Can
practising auditors act as accountants and auditors for the same company/client
even if they have prepared accounts from incomplete records?
Definition of incomplete records:
All vouchers, cheques and other details are available but
are not recorded in books such as cashbook, ledger etc.
Technical
Advisory Committee Recommendations
It
is not uncommon for accountants, acting as auditors of companies, to
provide concurrently other professional services for the same client,
including the writing-up of books of account and the preparation of
final accounts. This does not relieve the officers and directors of
the company from their statutory and financial responsibilities. It
is their responsibility to see that proper books of account are kept
and that accounts giving a true and fair view are prepared. Auditors
performing accounting services act in that connection in a separate
capacity of accountants, but while this may assist them in carrying
out their auditing duties, it in no way impinges on or modifies their
responsibility and duties as auditors. Dual responsibilities as accountants
and auditors are not regarded as necessarily incompatible professionally
nor are they prohibited by law, but all practising auditors have to
bear in mind that certain “judgements” are exercised while performing
the accounting function and in this regard they should either ensure
segregation of function or should not undertake accounting assignments
which would impair their independence as auditors.
Note:
The restrictions on certain non-audit services to audit clients being listed companies shall,
however, prevail over this ATR to the relevant extent.
