Skip to content

CMA Intermediate · Business Laws and Ethics · Operational and Financial Control

Under Section 144 of the Companies Act, 2013, which of the following services may NOT be rendered by the statutory auditor to the company?

Internal audit is expressly prohibited for a statutory auditor under Section 144. The section bars listed services such as internal audit, book keeping and actuarial services, while other services are allowed only with approval of the Board or audit committee.

  1. AInternal audit of the companyCorrect
  2. BCertification services approved by the Board of Directors
  3. CServices of representing the company before a tax authority, approved by the audit committee
  4. DVerification of statutory records, approved by the Board of Directors

Explanation

Section 144 lists internal audit among the services an auditor cannot render to the company, whether directly or indirectly. Other services are allowed only if approved by the Board or audit committee and not within the prohibited list. The other options are not in the list, so they can be given with approval.

Did you get it right without looking?

One question tells you little. A timed set on Operational and Financial Control shows your real accuracy, how long you take and where you lose marks.

Practise Operational and Financial ControlFree diagnostic mock

More Operational and Financial Control questions