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CMA Intermediate · Corporate Accounting and Auditing · National Financial Reporting Authority (NFRA)

NFRA debars a chartered accountant firm after proving misconduct. Which statement conforms to Section 132(4)(c)(B)?

NFRA may debar the member or firm for a minimum of six months and a maximum of ten years, as it determines. The debarment covers appointment as auditor or internal auditor, undertaking audits, and valuations under section 247, not statutory audit alone.

  1. ADebarment can be for a minimum of six months and a maximum of ten years, as determined by NFRACorrect
  2. BDebarment must be for a fixed period of exactly five years
  3. CDebarment can be for a minimum of one year and up to life
  4. DDebarment can only apply to statutory audit and not to internal audit or valuation under section 247

Explanation

The section allows debarment from being appointed as auditor or internal auditor, undertaking audit, or performing valuation under section 247, for a minimum of six months and up to ten years as NFRA determines. The last option wrongly narrows the scope.

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