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CS Executive · Corporate Accounting and Financial Management · Introduction to Corporate Accounting

Under section 132 of the Companies Act, 2013, the NFRA Chairperson and full-time members must not be associated with any audit firm (including related consultancy firms) for what period?

They must not be associated with any audit firm, including related consultancy firms, during their appointment and for two years after ceasing to hold it. This cooling-off period protects independence, so limiting the bar to the term of office alone is incorrect.

  1. ADuring the appointment and two years after ceasing to hold itCorrect
  2. BDuring the appointment only
  3. CDuring the appointment and one year after ceasing
  4. DFor five years after ceasing to hold the appointment

Explanation

The third proviso to section 132(3) bars full-time chairperson and members from association with any audit firm, including related consultancy firms, during the appointment and two years after ceasing to hold it. The option limiting it to the appointment only ignores the cooling-off period.

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