Duties of an auditor in regard to reduction of share capital
(1) The auditor should study the Articles to ascertain that the reduction of Share Capital is authorized by the Articles.
(2) He should then inspect the special resolution for reducing the Share Capital and verify that the meeting for such a resolution was convened properly.
(3) He should examine the order of the Court confirming the reduction and see that a copy of the order and the Minutes has been filed with the Registrar of Companies.
(4) He should inspect the Certificate of the Registrar as regards the reduction of capital.
(5) He should vouch the entries recorded in the Financial Books with the help of the documentary evidence.
(6) If capital in excess of the wants of the company has been paid off, the entries in the Cash Book should be compared with those in the Pass Book.
(7) The adjustment so made in the Register of Members should be verified. He should ensure that new certificates have been issued and the old ones have been cancelled.
(8) He should see that the assets affected as a result of the reduction of capital have been properly shown in the Balance Sheet.
(9) He should confirm that the words ‘and reduced’ have been added to name of the company as required by the Court’s order.
(10) He should also ensure that the Memorandum and Articles of Association have been suitably altered.