WEQ Ltd. has issued shares for cash at a premium. In accordance with section 52 of the Companies Act, 2013, the company is required to transfer the…

Application of Securities Premium Account: The securities premium account may be applied by the Company: towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares;in writing off the preliminary expenses of the Company;in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; orfor the purchase of its own shares or other securities under section 68. The auditor needs to verify whether the premium received on shares, if any, has been transferred to a “securities premium account" and whether the application of any amount out of the said “securities premium account" is only for the purposes mentioned above.