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CS Executive · Company Law and Practice · Accounts and Auditors

An auditor of a listed company, Bharat Steels Ltd, suspects a fraud by officers, but does not report it as required under section 143(12). Separately, the auditor of an unlisted company commits the same default. What penalty applies under section 143(15)?

The auditor of the listed company is liable to a penalty of five lakh rupees, and the auditor of the unlisted company to one lakh rupees. Section 143(15) fixes the penalty for failure to comply with the fraud reporting duty in sub-section (12) by listed status.

  1. ARupees five lakh for the listed company's auditor and rupees one lakh for the unlisted company's auditorCorrect
  2. BRupees one lakh for both
  3. CRupees five lakh for both
  4. DRupees ten lakh for listed and five lakh for unlisted

Explanation

Section 143(15) provides a penalty of five lakh rupees for a listed company and one lakh rupees for any other company. Distractors that equalise the amounts ignore the listed/other distinction.

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