Skip to content

CS Professional · Internal and Forensic Audit · Forensic Audit: Laws and Regulations

A forensic auditor distinguishes bodies in a fraud-risk report. Which pairing is correct?

The Audit Committee, constituted by the Board, evaluates internal financial controls and risk management systems under Section 177. The Inter-ministerial Co-ordination Committee, constituted by the Central Government under the PMLA, coordinates anti money-laundering and counter-terror-financing policy across authorities. The other options swap these roles.

  1. AAudit Committee under Section 177 of the Companies Act: evaluates internal financial controls and risk management systems; Inter-ministerial Co-ordination Committee: coordinates AML/CFT policy across authoritiesCorrect
  2. BAudit Committee: constituted by the Central Government by notification; Inter-ministerial Co-ordination Committee: constituted by the Board
  3. CAudit Committee: coordinates law enforcement agencies; Inter-ministerial Co-ordination Committee: approves related party transactions
  4. DBoth are Board committees reporting to the shareholders

Explanation

Section 177(4)(vii) gives the Audit Committee evaluation of internal financial controls and risk management systems, and it is constituted by the Board. The Inter-ministerial Co-ordination Committee is constituted by the Central Government under Section 72A of the PMLA for AML/CFT coordination. The other pairings swap their roles.

Did you get it right without looking?

One question tells you little. A timed set on Forensic Audit: Laws and Regulations shows your real accuracy, how long you take and where you lose marks.

Practise Forensic Audit: Laws and RegulationsFree diagnostic mock

More Forensic Audit: Laws and Regulations questions