INDEPENDENCE OF AUDITORS AND THEIR APPOINTMENT
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Abstract
The auditors are the most important part of the company as they are the one who analysis the position of the company and are actually aware of the position of the company. The appointment of the auditor is one of the most important aspects as they play an important role. Section 139 of the Company’s Act 2013 states how the auditors of the company should be appointed and the tenure of the auditors which is supplemented by the company rules. There should be independence of auditors as in case the auditors and the company collide with each other than that would create a great havoc for the investors and the shareholders who would ultimately result to occurring corporate fraud and there would be huge lose to the investors and shareholder. One such corporate fraud has been looked upon in this paper is the Satyam scam which made necessary for the laws to change and make it more strict. So in that case the Company’s Law 2013 has become strict and has tried to curb the shortcomings of the company’s Act 1956. Similarly there was increase in the happening of the corporate frauds in the United States so it was important for United States to come out with new laws in order to bring to an end to the corporate frauds taking place. So they came out with the Sarben Oxylen Act 2002 which made the laws more rigid for the corporate firms. Thus the paper focuses on the appointment and the importance of independence of auditors.
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