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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Committees

Kaveri Foods Ltd's statutory auditor wishes to attend the Audit Committee meeting when it considers the auditor's report. The Chairperson says the auditor may attend and speak but may also vote on approval. What is the correct position under Section 177?

Auditors have a right to be heard but not to vote. Section 177(7) gives the auditors and key managerial personnel a right to be heard when the Audit Committee considers the auditors report, without any voting right.

  1. AAuditors have a right to be heard but no right to voteCorrect
  2. BAuditors have both a right to be heard and a right to vote
  3. CAuditors may attend only if invited by the management and cannot speak
  4. DAuditors have no right to attend when their report is considered

Explanation

Section 177(7) gives auditors and key managerial personnel a right to be heard in Audit Committee meetings when the auditor's report is considered, but no right to vote. The option granting voting is wrong because they are not members of the committee.

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