Branch Audit and Branch Auditor

Section 2(14) of the Companies Act, 2013 defines “branch office”. It states that branch office in relation to a company, means any establishment described as such by the Company.

The provisions for Appointment of Branch Auditor by a Company are given under Section 143(8) and Rule 12 of the Companies (Audit & Auditors) Rule, 2014.

Branch Auditor –  Section 143(8):

As per Sec 143(8) where a company has a branch Office, the accounts of that office shall be audited either by :

1. The company’s statutory auditor; or
2. Any other person, qualified to be and appointed as an 14 Audit and Auditors auditor as per the provisions of the Act as branch auditor; or
3. In case of foreign branch, by the company’s auditor or by an accountant or a competent person appointed in accordance with the prevailing laws of the foreign country.

Duties of Branch Auditor as per Rule 12 of Companies (Audit & Auditors) Rule, 2014:

1. The duties and power of Branch Auditor shall be as contained in sub-section (1) to (4) of Sec 143 of Companies Act, 2013.
2. The Branch Auditor Shall Submit his report to the Company’s Auditor.
3. The Branch Auditor shall include in his report – “Report of Fraud” to the extend it relates to the concerned branch.

Practical Aspects for Appointment of Branch Auditor (who is other than statutory Auditor) :

1. Send Intimation Letter to proposed Branch Auditor
2. Avail an Eligibility and confirmation Letter from Branch Auditor
3. Hold Board Meeting and pass resolution for:

• • Proposal for appointment of Branch Auditor
  • Issue of Notice of General Meeting

4. Hold General Meeting and pass Ordinary Resolution
5. File Form ADT-1 within 15 days of General Meeting