CMA Final · Cost and Management Audit · Operational Audit and Internal Audit under Companies Act, 2013
Which of the following is among the matters on which the terms of reference of an Audit Committee must include, as per Section 177(4)?
The Audit Committee's written terms of reference must include evaluation of internal financial controls and risk management systems, along with items such as auditor recommendations, review of the financial statements, related party approvals, scrutiny of inter-corporate loans and investments, and monitoring end use of public offer funds.
- AFixing the dividend payable to shareholders
- BEvaluation of internal financial controls and risk management systemsCorrect
- CAppointment of the managing director
- DDetermining the cost audit fee of the cost auditor
Explanation
Section 177(4)(vii) lists evaluation of internal financial controls and risk management systems among the terms of reference. Dividend fixing, managing director appointment and cost audit fee are not listed in that sub-section.
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