Discharge of Contract by Agreement or Mutual Consent

What is “Discharge of Contract by Agreement”? The fundamental rule of law says that a thing can be brought to an end or destroyed in the same manner in which it was constituted. By applying this principle, an agreement or a contractual obligation can also be terminated by executing another agreement which may either be…

Board Resolution for Appointment of First Auditor: A Draft

What is this resolution for? The board resolution provided in the below paragraphs is for the first auditor’s appointment in a company. Auditors are to be appointed by every company to ensure that its financial statements for the relevant fiscal year accurately and fairly reflect the company’s state of affairs. It also serves as a…

Liabilities of Auditor under Common law and Statutory law

The importance of functions performed by an auditor has increased a lot during the past centuries. This has resulted in the auditor’s legal liability being established not only to the shareholders/clients but also to third parties. The liabilities of the auditor of a company in relation to his work have been expressly specified in several…

Verification of Liabilities, its Objectives and Procedures

Just as verification of assets, it is equally important for an auditor to verify the liabilities appearing in his client’s books. Liabilities are financial obligations of a business other than the owner’s equity. These may be long-term or short-term depending on the time for which resources are procured. For example, loans and borrowings, debentures, or…

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Categorised as Audit

SA 240 on Auditor’s Responsibility for Fraud: An overview

SA 240 entitled “The Auditor’s Responsibility to Consider Fraud and Error in an Audit of Financial Statements” gives guidance on what ought to be the responsibility of an auditor for identifying fraud and error and reporting on them. The important guidelines laid down under SA 240 regarding an auditor’s responsibility towards fraud and error are…

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Categorised as Audit

Revocation of Continuing Guarantee and its Ways

Revocation of Continuing Guarantee: Continuing guarantees are widely utilized in commercial transactions. Because of this guarantee, it is easier for a debtor to obtain goods on credit even if he does not have the money available. In this blog, we have discussed the meaning of a contract of continuing guarantee and how and when can…

Unenforceable Contracts: Common Causes for them

Enforceable and unenforceable contracts: A contract can be either enforceable or unenforceable. An enforceable contract can be described as one against which a legal remedy would be available if the contract is not fulfilled. This means that the parties thereto can take legal recourse in case there is a breach of contract. On the other…