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CS Professional · Internal and Forensic Audit · Cyber Forensics

Kaveri Textiles has no written contract on security standards with a vendor and no law specifies any. Its auditor asks what 'reasonable security practices and procedures' mean in this situation under Section 43A. Which is correct?

When neither an agreement nor any law specifies them, reasonable security practices and procedures are those prescribed by the Central Government in consultation with professional bodies or associations it deems fit, as the explanation to Section 43A provides.

  1. APractices decided solely by the board of the company
  2. BPractices prescribed by the Central Government in consultation with such professional bodies or associations as it may deem fitCorrect
  3. CPractices set by the vendor's own policy
  4. DPractices recommended by the statutory auditor

Explanation

The explanation says reasonable security practices are those specified in an agreement between the parties or in any law; in the absence of both, those prescribed by the Central Government in consultation with professional bodies or associations. The board or vendor policy is not the fallback.

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