Issue of Debentures

Debentures may be issued at par or at a premium or at a discount. When these are issued at a premium, the amount of premium collected should be credited to Premium on Debenture Account. Since it would be a capital Read More …

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AUDIT OF DEBENTURES

Allotment of Debentures As in the case of shares, in the case of debentures also, it is necessary for the auditor to verify whether allotment was made having regard to the terms and conditions contained in the prospectus or the Read More …

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VERIFICATION OF ISSUE OF BONUS SHARES

Primarily, it should be ascertained whether the Articles permit capitalisation of profits; also whether the company had a sufficient number of unissued shares for allotment as bonus shares. In addition, the following steps should be taken :  Inspect the Minute Read More …

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SHARES TRANSFER AUDIT

Frequently, big companies require auditors to undertake audit of share transfer recorded by the company during the previous year. The object of such an audit is detection of mistakes in the registration of transfers which may have the effect of Read More …

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OPTION ON SHARE CAPITAL

Schedule VI, Part I, requires disclosure of the particulars of any option on unissued share capital. An option on shares arises when a person has acquired a right under an agreement with the company to subscribe for share in the Read More …

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Re-issue of Forfeited Shares

The auditor should :  ascertain that the Board of Directors has the authority under the Articles to re-issue forfeited shares;  refer to the resolution of the Board of Directors, reallotting forfeited shares;  vouch the amounts collected from person to whom Read More …

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Verification of Forfeiture of Shares

The auditor should :  ascertain that the Articles authorise the Board of Directors to forfeit shares and that the power has been exercised by the Board in the best interest of the company;  verify the amount of call or instalment Read More …

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Reduction of Capital (Section 100)

The duties of the auditor in this regard are following :  Verifying that the meeting of the shareholder held to pass the special resolution was properly convened; also that the proposal was circularised in advance among the members.  Confirming that Read More …

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Alteration of Share Capital

A company, having a share capital, if so authorised by its Articles, may alter its share capital by an ordinary resolution without confirmation of the Court, in any of the manners authorised by Section 94. Each alteration made should be Read More …

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Issue and Redemption of Preference Shares

Power to issue redeemable preference shares : A company limited by shares, if authorised by its articles, may issue preference shares which are liable to be redeemed at the option of the company before or on an appointed date. However, Read More …

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