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CS Executive · Company Law and Practice · Accounts and Auditors

Himalaya Farmers Producer Company Ltd is a Producer Company. Its articles specify that internal audit will be done every quarter. Under the Companies Act, 2013 provisions for Producer Companies, who must carry out this internal audit?

A chartered accountant, as defined in the Chartered Accountants Act, 1949, must carry out the internal audit of a Producer Company. The interval and manner come from its articles, and the wider choice of professionals available under the general internal audit section does not apply.

  1. AA chartered accountant as defined in the Chartered Accountants Act, 1949Correct
  2. BA cost accountant or any professional chosen by the Board
  3. CA company secretary in practice
  4. DAny member of the company nominated by the Board

Explanation

Section 378ZF requires every Producer Company to have internal audit of its accounts carried out, at the interval and in the manner specified in its articles, by a chartered accountant as defined in the Chartered Accountants Act, 1949. The Board's discretion to choose other professionals applies under section 138, not to Producer Companies.

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