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CMA Intermediate · Corporate Accounting and Auditing · National Financial Reporting Authority (NFRA)

Under the Companies Act, 2013, the NFRA has the power to investigate professional or other misconduct committed by which of the following?

NFRA can investigate professional or other misconduct of a member or firm of chartered accountants registered under the Chartered Accountants Act, 1949, for the prescribed class of bodies corporate or persons, either suo motu or on a reference from the Central Government.

  1. AAny member or firm of chartered accountants registered under the Chartered Accountants Act, 1949, for such class of bodies corporate or persons as may be prescribedCorrect
  2. BOnly the directors of a company who sign the financial statements
  3. COnly cost accountants and company secretaries engaged in a company's audit
  4. DAny employee of the company's internal finance department

Explanation

Section 132(4)(a) empowers NFRA to investigate, suo motu or on a reference from the Central Government, matters of professional or other misconduct by a member or firm of chartered accountants registered under the CA Act, 1949, for the prescribed class of bodies corporate or persons. The other options name persons outside this power.

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