PROSECUTION / PENALTIES TO AUDITORS SL No SECTION IN THE MATTER OF PENALTY FINE INPRISONMENT 1 139 Penalty for non compliance with the provisions of Appt of Auditor a)If the auditor contravenes provision not less than 25000 may extend to 500000 139 b)If the auditor contravenes provision wilfuly with intention to deceive s/h for a term which may extend to 1 year and with fine not less than 1 lac & can extend to 25 lac 139 Auditor shall be liable to refund the remuneration received 139 by him from co & pay for damages to the Company. 2 143 Penalty for non compliance with the provisions of Power & duties of Auditor a)If the auditor contravenes provision not less than 25000 may extend to 500000 143 b)If the auditor contravenes provision wilfuly with intention to deceive s/h for a term which may extend to 1 year and with fine not less than 1 lac & can extend to 25 lac 143 Auditor shall be liable to refund the remuneration received 143 by him from co & pay for damages to the Company. 3 144 Penalty for non compliance with the provisions of Auditor not to render various services a)If the auditor contravenes provision not less than 25000 may extend to 500000 144 b)If the auditor contravenes provision wilfuly with intention to deceive s/h for a term which may extend to 1 year and with fine not less than 1 lac & can extend to 25 lac 144 Auditor shall be liable to refund the remuneration received 144 by him from co & pay for damages to the Company. 4 145 Penalty for non compliance with the provisions of Auditor to sign audit reports a)If the auditor contravenes provision not less than 25000 may extend to 500000 145 b)If the auditor contravenes provision wilfuly with intention to deceive s/h for a term which may extend to 1 year and with fine not less than 1 lac & can extend to 25 lac 145 145 Auditor shall be liable to refund the remuneration received by him from co & pay for damages to the Company. 5 132(4) Penalty for Professional misconduct ( Not notified till date) National Financial Reporting authority(NFRA) has power to investigate (a)either Suo motu (b) by a reference made by central government into the matter of professional or other misconduct committed by any member or firm of CA's registered under CA Act 132(4) IF MISCONDUCT PROVED (a)100000to 5 times of fees received(Individuals) DEBARRING THE MEMBER OR FIRM from practiice as member of ICAI for a min period of 6 mths to 10 Years as may be decided by NFRA 132(4) (b)1000000 to 10 times of fees received(Firms) 6 140(5) Penalty for Fraud by Auditors' National Company Law Tribunal(NCLT) either suo motu or by an application made by the central government : satisfied that auditor acted in a fraudelent manner in relation to company, directors or officers, NCLT may by order direct the company to change the auditor. 140(5) Auditor(Individual or firm ) against whom final order has been passed by tribunal under this section shall not be eligible to be appointed as an auditor for a period of 5 years from the date of passing the order & shall be liable u/s 447 Amount involved in the fraud to 3 times of amount involved in the fraud and Imprisonment 6 months to 10 years 7 447 Punishment for false Statement If any 447 return,report, certificate,financial staement, prospectus,statement or other particulars required under Companies Act,2013 & any person makes such statement : 447 a)false in material particulars, knowing it false. Amount involved in the fraud to 3 times of amount involved in the fraud and Imprisonment 6 months to 10 years 447 b)omit any material fact, knowing it to be material 447 8 447 Punishment for false evidence if person intentionally gives false evidence upto 10 lacs and imprisonment of 3 years to 7 years. 9 143(12) penalty for failure to disclose fraud (amended by Companies Amendment Bill 2014 ) If auditor believes any offence (involving fraud) is being committed by officers or employees against the Company, to be immediately report this to Central Government. If fails to report: 100000 to 2500000 143(12) (amended portion) in case of a fraud involving lesser than the specified amount, the auditor shall report the matter to the audit committee constituted under section 177 or to the Board in other cases within such time and in such manner as may be prescribed 143(12) Provided further that the companies, whose auditors have reported frauds under this sub-section to the audit committee or the Board but not reported to the Central Government, shall disclose the details about such frauds in the Board's report
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20-Jun-2018