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CMA Intermediate · Corporate Accounting and Auditing · Cost Audit

Under section 132 of the Companies Act, 2013, which of the following is a function of the National Financial Reporting Authority (NFRA)?

NFRA makes recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or their auditors. It does not appoint auditors or audit companies directly.

  1. AMaking recommendations to the Central Government on the formulation of accounting and auditing policies and standardsCorrect
  2. BDirectly notifying cost accounting records rules for all companies
  3. CAuditing the accounts of every company with turnover above a prescribed limit
  4. DAppointing the cost auditor of each company

Explanation

Section 132(2)(a) states that NFRA shall make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or their auditors. The other options are not functions listed in section 132.

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