By S. 174 (1), the auditor has the duty to report to the members on the accounts which are required to be laid before the company in the annual report meeting and on the company's accounting and others records.
-In the case of a holding company, the auditor is also required to report on the consolidated accounts.
-In the case of a borrowing corporation, the auditor is required to send a copy of the report to the trustee for the debenture holders.
The auditor is required to state on this report whether, on his opinion, the accounts and the consolidated accounts if any, have been properly drawn up:
-so as to give a true and fair view of the matters required to be dealt with in the accounts and consolidated accounts if any,
-in accordance with the provisions of the act so as to give a true and fair view of the company's affair.
-in accordance with the applicable accounting standards.
By S. 174 (3), it is also the duty of an auditor to form an opinion as to each of the following matters:
-whether he has obtained all the information and explanations that he required.
-whether proper accounting and other records have been kept by the company as required by the company.
-whether the returns received from branch offices of the company are adequate.
-whether the procedures and methods used by a holding company and a subsidiary in arriving at the amount taken into any consolidated accounts were appropriate to the circumstance of the consolidation.
If there was any failure or shortcoming in respect of any of these matters, the auditor must state particulars of it in his report.
-In relation to other breaches of the provision of the Companies Act, the auditor has the duty to report to the Registrar if he is satisfied that the matter will not be adequately dealt with the comment in his report or by bringing it to the notice of the directors.
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