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13.8.5 Auditor’s Duty

The duty of an auditor in respect of leasing transaction can be grouped under the following categories:

Lessor, i.e., Leasing Company

  1. The auditor should go through the objective clause of the leasing company to check whether the company is set up to deal with the leasing of assets as well as whether the company can undertake financing activities or not.
  2. The auditor shall also see the Board resolution to check whether a particular director has been authorised to execute the lease agreement.

Lease Agreement

  1. The auditor should note down the amount of lease rent, tenure of lease period, dates of payments, late fine charges, deposits or advances etc.
  2. The auditor should ensure that the description of the lessor, the lessee, the asset and the location where the asset will be delivered are included in the lease agreement.

  

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