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CMA Final · Corporate and Economic Laws · Accounts and Audit

Every Producer Company must have an internal audit of its accounts. Which statement is correct about who carries out this audit and how it is arranged?

A Producer Company's internal audit must be carried out by a chartered accountant as defined in the Chartered Accountants Act, 1949, and the interval and manner of the audit are as specified in the company's articles.

  1. AIt is done by a cost accountant at yearly intervals fixed by the Registrar
  2. BIt is done by a company secretary at intervals fixed by the board in each year
  3. CIt is done by a chartered accountant, at such interval and in such manner as specified in the articlesCorrect
  4. DIt is done by any person appointed by the Tribunal at intervals it decides

Explanation

Section 378ZF requires internal audit of a Producer Company's accounts by a chartered accountant as defined in the Chartered Accountants Act, 1949, at such interval and in such manner as the articles specify. Cost accountant or company secretary is not provided, and the interval is set by the articles, not the Registrar or Tribunal.

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