Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Statutory Audit under the Companies Act, 2013

Which statement about the Audit Committee's dealings with the statutory auditors is correct under section 177?

Auditors have a right to be heard when the Audit Committee considers the auditor's report, but they have no right to vote. Section 177(7) gives this same position to key managerial personnel, so the committee's decisions remain those of its members.

  1. AAuditors have a right to be heard at Audit Committee meetings considering the auditor's report and also a right to vote
  2. BAuditors have a right to be heard at Audit Committee meetings considering the auditor's report but no right to voteCorrect
  3. CAuditors may attend only if the Board invites them and cannot be heard
  4. DAuditors may vote only on matters relating to their own remuneration

Explanation

Section 177(7) gives the auditors and key managerial personnel a right to be heard in meetings when the committee considers the auditor's report, but not a right to vote. Option one wrongly adds voting rights.

Did you get it right without looking?

One question tells you little. A timed set on Statutory Audit under the Companies Act, 2013 shows your real accuracy, how long you take and where you lose marks.

Practise Statutory Audit under the Companies Act, 2013Free diagnostic mock

More Statutory Audit under the Companies Act, 2013 questions