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CMA Intermediate · Corporate Accounting and Auditing · Report on Internal Financial Control over Financial Reporting

Which of the following is included in the definition of 'internal financial controls' given in the explanation to section 134 of the Companies Act, 2013?

Internal financial controls include policies and procedures for orderly and efficient conduct of business, adherence to company policies, safeguarding assets, preventing and detecting frauds and errors, accuracy and completeness of records, and timely reliable financial information. They are not limited to cash or dividends.

  1. APolicies and procedures for orderly and efficient conduct of business, including safeguarding of assets and prevention and detection of frauds and errorsCorrect
  2. BOnly controls over cash receipts and payments
  3. COnly the controls exercised by the audit committee over the auditor
  4. DPolicies for determining the dividend payable to shareholders

Explanation

The definition covers policies and procedures adopted for orderly and efficient conduct of business, adherence to company policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The other options are too narrow or unrelated.

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