Skip to content

CS Professional · Internal and Forensic Audit · Internal Controls

Which statement about internal audit under the Companies Act, 2013 is correct?

Prescribed classes of companies must appoint an internal auditor, who may be a chartered accountant, a cost accountant or another professional decided by the Board. The requirement is not universal and does not demand the statutory auditor or only a Company Secretary under section 138(1).

  1. APrescribed classes of companies must appoint an internal auditor who is a chartered accountant, a cost accountant or another professional decided by the BoardCorrect
  2. BEvery company, whatever its class, must appoint a chartered accountant as internal auditor
  3. CThe internal auditor must always be the statutory auditor of the company
  4. DThe internal auditor must be a Company Secretary only

Explanation

Section 138(1) applies to such classes of companies as may be prescribed, and the internal auditor may be a chartered accountant, a cost accountant or another professional the Board decides. It does not apply to all companies and does not require the statutory auditor or only a Company Secretary.

Did you get it right without looking?

One question tells you little. A timed set on Internal Controls shows your real accuracy, how long you take and where you lose marks.

Practise Internal ControlsFree diagnostic mock

More Internal Controls questions