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CMA Final · Corporate and Economic Laws · Accounts and Audit

Which of the following correctly describes the internal audit requirement for a Producer Company under the Companies Act, 2013?

Every Producer Company must have its accounts internally audited at the interval and in the manner specified in its articles, by a chartered accountant as defined in the Chartered Accountants Act, 1949. It is mandatory, not optional.

  1. AInternal audit is optional and left to the Board
  2. BInternal audit of its accounts must be carried out at an interval and in a manner specified in its articles, by a chartered accountant as defined in the Chartered Accountants Act, 1949Correct
  3. CInternal audit must be carried out every quarter by a cost accountant
  4. DInternal audit must be carried out annually by the Registrar's nominee

Explanation

Every Producer Company must have internal audit of its accounts, at such interval and in such manner as the articles specify, by a chartered accountant as defined in the Chartered Accountants Act, 1949. The interval is set by the articles, not fixed at quarterly, and the auditor is a chartered accountant, not a cost accountant.

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