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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, its holding company or its subsidiary company?

Internal audit is expressly prohibited. Section 144 of the Companies Act, 2013 bars the statutory auditor from rendering internal audit to the company, its holding company or its subsidiary, directly or indirectly, to protect the auditor's independence.

  1. AInternal auditCorrect
  2. BStatutory audit of the subsidiary's accounts
  3. CAttending the general meeting to answer queries on the audit report
  4. DCertification of the company's compliance with the audit report's requirements

Explanation

Section 144 lists services an auditor cannot render, including accounting and book keeping, internal audit, design and implementation of financial information systems, and management services. Statutory audit and attending meetings are part of the auditor's own role, not prohibited non-audit services.

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