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CS Professional · Internal and Forensic Audit · Internal Controls

Sundaram Textiles Ltd's Audit Committee wants the statutory auditor's views on the adequacy of the company's internal control systems before the financial statements go to the Board. Which statement matches the Companies Act, 2013?

The Audit Committee may call for the auditors' comments on internal control systems and the audit scope, and review financial statements before they are submitted to the Board. It may also discuss related issues with internal and statutory auditors and management, as section 177(5) provides.

  1. AThe Audit Committee may call for the auditors' comments about internal control systems and the scope of auditCorrect
  2. BThe Audit Committee can only receive comments after the Board has approved the financial statements
  3. CThe Audit Committee must not discuss internal controls with the statutory auditors
  4. DOnly the management may ask the auditors to comment on internal control systems

Explanation

Section 177(5) allows the Audit Committee to call for the auditors' comments about internal control systems, the scope of audit and review of financial statements before submission to the Board. It may also discuss related issues with internal and statutory auditors and management. The other options contradict this.

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