Every auditor has a right of access to the books of accountand vouchers of the company at all times, whether they are at the registered office of the company or at any other place.
The auditor of a holding company also has a right of access to the records of the subsidiary company if they are necessary for the purposes of the consolidation.
An auditor also has a right to receive notice of any general meeting. He may attend it himself or through his authorized representative who is also qualified to be an auditor. He also has a right to be heard on any part of the business which concerns him.
The auditor also has a right to receive information and explanation regarding the matters which are necessary for the performance of his duties. He needs to know whether:
The company makes loans and advances against proper security and the terms of these are prejudicial to the interests of the company.
Transactions that merely represent a book entry are prejudicial to the interests of the company.
In the case of a company which is not an investment or banking company, it sells the assets. They are in the form of shares, debentures, and other securities at a price less than their purchase price.
The company shows the loans and advances that it makes as deposits.
It charges the personal expenses to revenue account.
It states in the books and documents that where it has allotted the shares in cash, it has received the cash or not. Also, whether the position in the books and Balance Sheet is correct and not misleading.