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Home » » Companies (Auditor's Report)(Amendment) Order, 2004 - Clause 4(iii)(e)

Companies (Auditor's Report)(Amendment) Order, 2004 - Clause 4(iii)(e)

Written By Admin on Sunday, 1 April 2012 | Sunday, April 01, 2012

Clause 4(iii)(e)

has the company taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. If so, give the number of parties and amount involved in the transactions.


1) The auditor is required to comment on this clause also with reference to the companies, firms or other parties covered in the register maintained under section 301 of the Act.

2) The duty of the auditor, under this clause, is to determine whether the company has taken any loans, secured or unsecured from companies, firm or other parties covered in the register maintained under section 301 of the Act. 

3) Apart from reporting the number of parties, the auditor is also required to disclose the “amounts involved”. Since the Order does not clarify what constitutes “amounts involved”, it would be proper if the auditor discloses the maximum amount involved during the year in the transactions covered by this clause. While commenting upon this clause, the auditor may also consider whether the year-end balance should also be disclosed in his audit report. 

4) Steps to be taken by the auditor are exactly similar as in case of reporting under loans given by the company, as discussed in paragraph 50, such as obtaining list of parties, making separate disclosures, etc., except for the fact that in this case the auditor shall report in respect of loans taken from instead of loans granted to specified parties. 
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