CMA Intermediate · Corporate Accounting and Auditing · National Financial Reporting Authority (NFRA)
Under section 132 of the Companies Act, 2013, for how long after ceasing to hold appointment must a full-time chairperson or full-time member of the NFRA stay unassociated with any audit firm (including related consultancy firms)?
The cooling-off period is two years. Full-time chairperson and members of the NFRA must not be associated with any audit firm, including related consultancy firms, during their appointment and for two years after ceasing to hold it, as stated in section 132(3).
- ASix months
- BOne year
- CTwo yearsCorrect
- DFive years
Explanation
The third proviso to section 132(3) bars full-time chairperson and members from being associated with any audit firm, including related consultancy firms, during their appointment and for two years after ceasing to hold it. One year is a common wrong guess.
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