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CMA Final · Cost and Management Audit · Internal Control and Internal Audit

Under Section 177 of the Companies Act, 2013, which of the following is a right of the statutory auditors and key managerial personnel in relation to Audit Committee meetings?

Auditors and key managerial personnel have a right to be heard at Audit Committee meetings when the committee considers the auditor's report, but they cannot vote. Section 177(7) separates the right to be heard from voting, which stays with committee members.

  1. ARight to be heard when the committee considers the auditor's report, without a right to voteCorrect
  2. BRight to vote when the committee considers the auditor's report
  3. CRight to appoint the committee chairperson
  4. DRight to veto related party approvals

Explanation

Section 177(7) gives auditors and KMP a right to be heard in Audit Committee meetings when it considers the auditor's report, but they have no right to vote. Voting rights belong to committee members only, so the voting option is wrong.

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