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CMA Intermediate · Business Laws and Ethics · Operational and Financial Control

Under the Companies Act, 2013, which one of the following services may an auditor appointed under the Act provide to the company, subject to approval by the Board of Directors or the audit committee, as the case may be?

An auditor may provide non-audit services approved by the Board or audit committee, such as certification work, provided the service is not in the prohibited list. Internal audit, actuarial services, and accounting and book keeping are expressly barred under Section 144.

  1. AInternal audit of the company
  2. BActuarial services to the company
  3. CAccounting and book keeping services
  4. DCertification work that is not among the listed prohibited servicesCorrect

Explanation

Section 144 lets the auditor provide only such other services as the Board or audit committee approves, but it bars accounting and book keeping, internal audit, actuarial services and the other listed services. Certification work is not listed, so it can be provided with approval. The other three options are expressly prohibited.

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