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CS Executive · Company Law and Practice · Accounts and Auditors

Under the Companies Act, 2013, who decides the manner and the intervals at which the internal audit of a prescribed company is to be conducted and reported to the Board?

The Central Government prescribes, through rules, how and at what intervals the internal audit is conducted and reported to the Board. This power is given by the internal audit section itself, so neither members nor the statutory auditor nor the Registrar fixes it.

  1. AThe company's members by ordinary resolution in every annual general meeting
  2. BThe Central Government, by rulesCorrect
  3. CThe statutory auditor, in the audit report
  4. DThe Registrar of Companies, by general circular

Explanation

Section 138(2) empowers the Central Government to prescribe by rules the manner and intervals in which internal audit shall be conducted and reported to the Board. Members, the statutory auditor and the Registrar have no such power under that sub-section.

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