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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 expressly listed as one that an auditor appointed under the Act shall NOT provide to the company, directly or indirectly?

Internal audit is the service the statutory auditor cannot render. Section 144 of the Companies Act, 2013 prohibits the auditor from providing internal audit services, directly or indirectly, to the company, its holding company or subsidiary, to protect auditor independence.

  1. AInternal auditCorrect
  2. BStatutory audit of subsidiary accounts
  3. CAttending the annual general meeting
  4. DReporting on internal financial controls

Explanation

Section 144 lists services barred for the statutory auditor: accounting and book keeping, internal audit, design and implementation of financial information systems, actuarial, investment advisory, investment banking, outsourced financial services and management services. Reporting on internal financial controls and attending the AGM are part of the audit function itself, not barred non-audit services.

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