Branch Audit

Where a company has a branch office, the accounts of that office shall be
audited either by the auditor appointed for the company (herein referred to as
the companys auditor), or by any other person qualified for appointment as an
auditor of the company, or where the branch office is situated in a country
outside India, the accounts of the branch office shall be audited either by the
companys auditor or by an accountant or by any other person duly qualified to
act as an auditor of the accounts of the branch office in accordance with the
laws of that country. The branch auditor shall prepare a report on the accounts
of the branch examined by him and send it to the auditor of the company who
shall deal with it in his report in such manner as he considers necessary.
[Section 143(8)]

For the purposes of sub-section (8) of section 143, the duties and powers of the
companys auditor with reference to the audit of the branch and the branch
auditor, if any, shall be as contained in sub-sections (1) to (4) of section 143.
[Rule 12(1)]

The branch auditor shall submit his report to the companys auditor. [Rule
12(2)]

The provisions of sub-section (12) of section 143 read with rule 12 hereunder
regarding reporting of fraud by the auditor shall also extend to such branch
auditor to the extent it relates to the concerned branch. [Rule 12(3)].

Joint Audit

A joint audit is an audit on a legal entity (the auditee) by two or more auditors to produce a
single audit report, thereby sharing responsibility for the audit. A typical joint audit has
audit planning performed jointly and fieldwork allocated to the auditors.

The practice of appointing more than one auditor to conduct the audit of large entities has
been in vogue for a long time. Such auditors, known as joint auditors, conduct the audit
jointly and report on the financial statements of the entity. This AAS deals with the
professional responsibilities which the auditors undertake in accepting such appointments as
joint auditors. The important aspect of joint audit assignments as covered by this AAS
include possible bases of division of work among joint auditors, coordination among joint
auditors, joint and several liability of joint auditors, responsibility for obtaining and
evaluating information and explanation from management, responsibility for scrutiny of
branch accounts and returns, need for review of work performed by one joint auditor by other
joint auditor(s), reporting responsibilities etc.
The AAS is effective for all audits relating to accounting periods beginning on or after April
1, 1996.

Special Audit:
An assessment based on a report by an auditor that requests further analysis of a business
practice.
233A. 1 Power of Central Government to direct special audit in certain cases.
(1) Where the Central Government is of the opinion-
(a) that the affairs of any company are not being managed in accordance with sound business
principles or prudent commercial practices; or
(b) that any company is being managed in a manner likely to cause serious injury or damage
to the interests of the trade, industry or business to which it pertains; or
(c) that the financial position of any company is such as to endanger its solvency; the Central
Government may at any time by order direct that a special audit of the company' s accounts
for such period or periods as may be specified in the order, shall be conducted and may by
the same or a different order appoint either a chartered accountant as defined in clause (b) of
sub- section (1) of section 2 of the Chartered Accountants Act. 1949 (38 of 1949 .) (whether
or not such chartered accountant is a chartered accountant in practice within the meaning of
that Act), or the company' s auditor himself to conduct such special audit.
(2) The chartered accountant or the company' s auditor appointed under sub- section (1) to
conduct a special audit as aforesaid is here- after in this section referred to as the special
auditor.
(3) The special auditor shall have the same powers and duties in relation to the special audit
as an auditor of a company has under section 227: Provided that the special. auditor shall,
instead of making his report to the members of the company, make the same to the Central
Government.
(4) The report of the special auditor shall, as far as may be, include all the matters required to
be included in an auditor' s report under section 227 and, if the Central Government so
directs, shall also include a statement on any other matter which may be referred to him by
that Government.

Guidance Note on Audit Reports and Certificates for Special Purposes

The increasing involvement of members in giving audit reports or certificates on special
purpose statements or other information prepared by an enterprise necessitated the need
for guidance to the auditor regarding various facets of such assignments including the
form and contents of audit reports and certificates for special purposes. In view of this,
the Institute brought out this Guidance Note on Audit Reports and Certificates for
Special Purposes.
The following is an overview of the areas touched upon by the Guidance Note:

Scope of special purpose reports and certificates

Responsibility for preparation of special purpose statements
Scope of the reporting auditors functions
Contents of such reports and certificates
Reports and certificates on specific items of financial statements
Communication of report or certificate
Communication with previous auditor.
The Guidance Note also contains examples of such reports and certificates.