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Section 145: Auditor to sign audit reports, etc

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Act 2013
Section 144 All 470 Sections of Companies Act Section 146
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 145

Section 145 of the Companies Act, 2013 governs the personal statutory signing of audit reports and certificates by qualified Chartered Accountants and establishes the mandatory requirement that adverse audit qualifications be read before the general meeting.

  • Mandatory Signature by Qualified Auditor: The person appointed as statutory auditor must sign the auditor's report or sign or certify any other document of the company in accordance with Section 141(2); where a firm is appointed, only Chartered Accountant partners practicing in India are legally authorized to sign.
  • Mandatory Reading of Adverse Qualifications: Qualifications, observations, or adverse comments on financial transactions or matters affecting the company mentioned in the auditor's report must be read out aloud before the members at the general meeting.
  • Unrestricted Member Inspection Right: All qualified observations and reports must remain open to inspection by any member of the company, ensuring complete financial transparency and shareholder awareness.
Key Landmark Precedents:
  • Registrar of Companies v. P.K. Mukherji, AIR 1968 SC 1104: The Supreme Court held that signing an audit report without verifying the underlying books of account constitutes gross professional misconduct and a breach of public statutory duty, holding the individual signatory strictly accountable.
  • Deputy Secretary to Government of India v. S.N. Dasgupta, AIR 1956 Cal 414: The Calcutta High Court held that the statutory mandate requiring the reading of adverse qualifications before the general body is designed to prevent management from suppressing auditor criticisms from public view.
Courtroom Practice & Strategic Litigation Guidance:

When challenging resolutions passed at an AGM where a management fraud was subsequently uncovered, examine the verbatim minutes under Section 118. If the company secretary or chairman failed to read the auditor's qualified or adverse observations before the house as mandated by Section 145, plead this procedural violation before the NCLT to establish improper suppression of material financial warnings from the general body.

Section 144 All 470 Sections of Companies Act Section 146