Skip to content

CA Final · Advanced Auditing, Assurance and Professional Ethics · Overview of Audit of Public Sector Undertakings

CA Anil is the statutory auditor of Narmada Fertilisers Ltd, a Government company. In the audit report, apart from the Companies Act reporting requirements, he must also address certain matters. Which of the following is a matter that a statutory auditor of a Government company is specifically required to state in the report under the Companies Act, 2013, in addition to the standard clause?

The auditor of a Government company must report whether the company has a system to process all accounting transactions through an IT system, and the implications for integrity of accounts and financial effects if transactions are processed outside it. The other matters listed are not statutory reporting requirements.

  1. AWhether the company has system in place to process all accounting transactions through IT system, with implications of processing outside IT system on integrity of accounts and financial implications, if anyCorrect
  2. BWhether the company's annual plan has been approved by the Planning Commission
  3. CWhether the company's dividend policy conforms to Ministry of Finance targets
  4. DWhether the chairman's remuneration was approved by the CAG

Explanation

The directions under the Act for Government companies require the auditor to state whether the company has a system to process all accounting transactions through an IT system, along with implications of processing outside it for integrity of accounts and financial implications. The other matters are not part of the report requirements. Distractors invent unrelated requirements.

Did you get it right without looking?

One question tells you little. A timed set on Overview of Audit of Public Sector Undertakings shows your real accuracy, how long you take and where you lose marks.

Practise Overview of Audit of Public Sector UndertakingsFree diagnostic mock

More Overview of Audit of Public Sector Undertakings questions