CS Professional · Internal and Forensic Audit · Internal Controls
Sunrise Textiles Ltd's CFO says, 'Our internal control system exists so that business is run in an orderly and efficient way, assets are safeguarded and accounting records are accurate.' Which of the following objectives is NOT mentioned in the Companies Act, 2013 explanation to the term 'internal financial controls' in Section 134?
Maximisation of market share is not an objective of internal financial controls under the Companies Act, 2013. The statutory explanation lists policy adherence, asset safeguarding, fraud and error prevention and detection, accurate records and timely reliable financial information, but says nothing of commercial targets like market share.
- AAdherence to the company's policies
- BPrevention and detection of frauds and errors
- CMaximisation of the company's market shareCorrect
- DTimely preparation of reliable financial information
Explanation
The explanation to Section 134(5)(e) lists orderly and efficient conduct of business, adherence to policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of records, and timely reliable financial information. Market share maximisation is a business goal, not a listed control objective.
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