CS Professional · Internal and Forensic Audit · Internal Audit: Introduction and Overview
Under Section 138 of the Companies Act, 2013, who may be appointed as the internal auditor of a company that is required to have one?
The Board may appoint a chartered accountant, a cost accountant or any other professional it considers suitable as internal auditor, and that person can be an employee of the company. The Act does not confine the role to one profession and bars the statutory auditor from it.
- AOnly a chartered accountant in practice
- BOnly a cost accountant in practice
- COnly the statutory auditor of the company
- DA chartered accountant, cost accountant or other professional decided by the Board, who may be an employeeCorrect
Explanation
Section 138 allows the internal auditor to be a chartered accountant or cost accountant (whether or not in practice) or any other professional the Board decides, and the person may be an employee of the company. The statutory auditor cannot be appointed as internal auditor, so the option limiting it to them is wrong, and the other options wrongly restrict the pool to one profession.
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