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CA Final · Advanced Auditing, Assurance and Professional Ethics · Overview of Audit of Public Sector Undertakings

Rohini Heavy Machinery Ltd is a Government company in which the Central Government holds 78% of paid-up capital. For the current year, who has the power to appoint the statutory auditor of this company?

The Comptroller and Auditor General of India appoints the statutory auditor of a Government company under the Companies Act, 2013. The appointment is not made by the members at the AGM, as for ordinary companies, nor by the Board or Audit Committee.

  1. AThe Comptroller and Auditor General of IndiaCorrect
  2. BThe Central Government
  3. CThe members at the annual general meeting, on the Board's recommendation
  4. DThe Audit Committee of the company

Explanation

Under the Companies Act, 2013, the statutory auditor of a Government company is appointed by the Comptroller and Auditor General of India (C&AG) within 180 days of the commencement of the financial year. Appointment by members at the AGM is the route for non-Government companies, so option C is wrong.

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