CMA Intermediate · Corporate Accounting and Auditing · National Financial Reporting Authority (NFRA)
CA Ravi Menon, an individual, received audit fees of Rs 8,00,000 from a company, and NFRA proves professional misconduct against him. Applying section 132(4)(c), the maximum penalty NFRA can impose on him is:
The maximum penalty is Rs 40,00,000, being five times the Rs 8,00,000 fees received. Five times applies to individuals, while the ten-times ceiling is for firms, and Rs 1,00,000 is merely the minimum penalty for an individual.
- ARs 8,00,000
- BRs 40,00,000Correct
- CRs 80,00,000
- DRs 1,00,000
Explanation
For individuals the penalty may extend to five times the fees received: 5 x 8,00,000 = Rs 40,00,000. Ten times (Rs 80,00,000) applies to firms. Rs 1,00,000 is only the minimum.
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