Question ID :
44958
243104
Sir
one of the company has deposited the share capital amount of 10 lakh in bank account,later a director has withdrawn the amount of 9.52lakhs.now the situation stands loan to director.how we can report the same in audit report.the company is a small company with no borrowings.the amount withdrawn by the director was later deposited by the director on April 2025
Posted by
SINSH. M E
on
Jan 21, 2026
Filed Under
CORPORATE & OTHER LAWS
It looks the Loan given is not in accordance with Section of 185 of Companies Act. In my opinion, the you have to ensure whether proper disclosures have duly been made in the Financial Statements regarding loan taken by Director. For instance, Financial Statements should clearly reflect the Loan taken by Director under Loans and Advances to related parties as a part of Schedule III Requirement and Board Report should highlight the issue. If disclosures are clearly made the Auditor may ignore the issue, as Auditor is not required to report non compliances in Main /Independent Audit Report. If not, he has report the issue/non compliance as a part of his Opinon on Financial Statements. You may refer SA 700 (forming opinon and Reporting on Financial Statments). I assumed CARO is not applicable to your Company
Posted by
Rupakula Rajasekhar on
Jan 21, 2026