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CS Professional · Internal and Forensic Audit · Audit and Investigations

The Central Government forms an opinion that the affairs of Kaveri Agro Ltd are being conducted with intent to defraud its creditors, and that it is in the public interest to investigate. Which authority does the Act empower to carry out the investigation in such a case?

Where the Central Government considers an investigation necessary, for instance in the public interest or because of suspected fraud on creditors, it can assign the case to the Serious Fraud Investigation Office. The SFIO is the specialised agency that carries out such investigations and reports to the Government.

  1. AThe Registrar of Companies alone, acting without further direction
  2. BThe Serious Fraud Investigation Office, when the case is assigned to it by the Central GovernmentCorrect
  3. CThe company's statutory auditor, who must file the report
  4. DThe National Financial Reporting Authority only

Explanation

The Central Government can assign the investigation of the company's affairs to the Serious Fraud Investigation Office (SFIO) where it forms the opinion that it is necessary, for example in the public interest. The SFIO is the specialised agency for this. The auditor and NFRA do not carry out such investigations on the Government's order, and the Registrar is not the sole agency.

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