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CA Final · Advanced Auditing, Assurance and Professional Ethics · Internal Audit

Gramin Milk Producer Company wants its accounts internally audited. Its articles specify the interval and manner. Who may carry out the internal audit under section 378ZF of the Companies Act, 2013?

Only a chartered accountant as defined in the Chartered Accountants Act, 1949 may do it. Section 378ZF requires a Producer Company's internal audit to be carried out by such a chartered accountant at the interval and in the manner specified in its articles, unlike section 138, which allows other professionals.

  1. AOnly a chartered accountant as defined in the Chartered Accountants Act, 1949Correct
  2. BA cost accountant or any professional decided by the Board
  3. CAny employee nominated by the chief executive
  4. DA company secretary in practice

Explanation

Section 378ZF requires a Producer Company to have internal audit of its accounts done, at interval and manner specified in its articles, by a chartered accountant as defined in the Chartered Accountants Act, 1949. The flexibility for cost accountants or other professionals is in section 138 for other companies, not here.

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