Enquiry:

Section 251 of the Companies Act, 2017 states that ‘if the auditor is an individual the report must be signed by him’. A clarification is required, whether a sole-proprietor has to affix his or her personal signatures on the audit report now against the previous practice of signing in the name of the firm.

 

Opinion:

Your attention is drawn to section 251 of the Companies Act, 2017:

“251.   Signature of auditor’s report.- (1) The auditor’s report must state the name of the auditor, engagement partner, be signed, dated and indicate the place at which it is signed.

   2) Where the auditor is an individual, the report must be signed by him.”

Further, ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, mentions that:

  “A64. The auditor’s signature is either in the name of the audit firm, the personal name of the auditor or both, as appropriate for the particular jurisdiction”.

The jurisdiction practice is that the report is signed in the name of which the sole proprietor/ firm is registered. If the sole proprietor is registered in his name, he will use his name in signing if is registered by his initials such as BH & Co. then will sign using those initials.

 

(October 02, 2017)