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CMA Final · Cost and Management Audit · Operational Audit and Internal Audit under Companies Act, 2013

Under Section 177(7), what is the position of the statutory auditors and key managerial personnel at an Audit Committee meeting that considers the auditors' report?

Auditors and key managerial personnel have a right to be heard at Audit Committee meetings when the auditors' report is considered, but they cannot vote. Section 177(7) makes this explicit, so the voting and exclusion alternatives do not match the law.

  1. AThey have a right to be heard but no right to voteCorrect
  2. BThey have a right to vote but not to be heard
  3. CThey must be excluded from the meeting
  4. DThey may vote only if the Chairperson permits

Explanation

Section 177(7) gives auditors and KMP a right to be heard when the Committee considers the auditors' report, and expressly denies them a right to vote. Exclusion or conditional voting is not provided by the text.

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