Skip to content

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

Under the Companies Act, 2013, which of the following services is an auditor appointed under the Act expressly barred from providing to the company, whether directly or indirectly?

The statutory auditor is barred from providing internal audit services to the company. Section 144 of the Companies Act, 2013 lists internal audit among prohibited non-audit services, to protect independence. Normal audit duties such as attending the AGM or reporting on controls are part of the audit itself.

  1. AInternal audit of the companyCorrect
  2. BStatutory audit of its subsidiary's accounts
  3. CAttending the annual general meeting to answer queries
  4. DReporting on internal financial controls as part of the audit report

Explanation

Section 144 lists services the statutory auditor cannot render, including accounting and book keeping, internal audit, design and implementation of financial information systems, actuarial, investment advisory, investment banking, outsourced financial and management services. The other options are part of the statutory audit role and are not prohibited.

Did you get it right without looking?

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

Practise Internal Control and Internal AuditFree diagnostic mock

More Internal Control and Internal Audit questions