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CA Final · Advanced Auditing, Assurance and Professional Ethics · Special Features of Audit of Banks & Non-Banking Financial Companies

The RBI considers it necessary, in the interest of depositors, to examine certain transactions of Meghdoot Capital Ltd, an NBFC. Which statement about the RBI's powers over the audit is correct under the RBI Act, 1934?

The RBI may by order direct a special audit of specified transactions or periods and appoint the auditors, who report to it. Their remuneration, as fixed by the Bank, is borne by the NBFC audited. Shareholder consent is not required.

  1. AThe RBI may order a special audit for specified transactions or periods, appoint the auditor, and the NBFC bears the remuneration fixed by the RBICorrect
  2. BThe RBI may order a special audit, but the remuneration is borne by the RBI
  3. CA special audit needs the prior consent of the NBFC's shareholders
  4. DThe RBI can only direct the existing statutory auditor and cannot appoint another auditor

Explanation

Section 45MA(3) lets the Bank, in the public interest or depositors' interest, order a special audit for specified transactions or periods and appoint the auditor. Under 45MA(4), the remuneration fixed by the Bank is borne by the NBFC audited. The other options contradict this.

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