CH07-AC&CG

MCQ--AC.1

ABC Ltd is one of the top 1000 listed entities on the basis of market capitalisation. The Board of Directors of ABC Ltd does not comprise of any women director. The Statutory Auditor who is certifying Corporate Governance as per SEBI regulations, has to ascertain that –

(CNO-ACCG.200)

• a) The Board of directors will have at least 2 independent woman director.

• b) The Board of directors will have at least 1 independent woman director.

• c) The Board of directors will have at least 5 independent woman director.

• d) None of the above

MCQ--AC.3

The Audit Committee should consist of the following:

(CNO-ACCG.160)

• a) Minimum of 3 directors with independent directors forming a majority.

• b) Minimum of 4 directors with only one independent director.

• c) Minimum 2 directors which are independent.

• d) Minimum 5 directors with 1 independent woman director

MCQ--AC.4

The auditor should ensure that the board of directors of the top 1000 (2000 from April 20) listed entities shall comprise of –

(CNO-ACCG.200)

• a) not less than 7 directors.

• b) not less than 4 directors.

• c) not less than 6 directors.

• d) not less than 2 directors

MCQ--AC.5

The Board of Directors of XYZ Ltd, one of the top 2000 listed entities meets 4 times a year. What should be the quorum of the Board of Directors from 1st April 2021 The auditors have suggested that such an attitude of non-cooperation would not help the either party and would defeat the objective of the audit. The management of the company is, however, ready to provide any other information to the auditors. In this situation, please advise both the management and the auditors.

(CNO-ACCG.300)

• a) 1/3rd of its total strength or 3 directors, whichever is higher, including at least 1 independent director.

• b) 1/3rd of its total strength or 4 directors, whichever is higher, including at least 1 independent director.

• c) 1/3rd of its total strength or 3 directors, whichever is higher, including at least 2 independent director.

• d) 1/3rd of its total strength or 3 directors, whichever is higher, including at least 1 nonexecutive director.

MCQ--AC.6

High Limited is a public limited company engaged in the manufacturing of watches. The company has appointed CA. Eshaan as statutory auditor of the company for the year 2018-19. On verification of the composition of Board of Directors of the company, the auditor observed that during the reporting period in one of the board meeting the chairman was non-executive director and less than one-third of the Board comprised of Independent Directors. The auditor wants to examine the effect of changes in the composition of the Board and/or its chairman and its impact on compliance throughout the reporting period. But the management restricts the auditor from examining the same. Whether the auditor has right to examine the effect of changes in composition of board?

(CNO--ACCG.200)

• a) The auditor has no right to verify the composition of Board and examine the effect of changes in the composition since it is not related with preparation of financial statements.

• b) The auditor should verify the composition of Board and examine its impact on compliance throughout the reporting period as a part of certifying compliance with the requirements of corporate governance.

• c) The management’s act is void, as the auditor is appointed by Board of Directors only so the auditor should necessarily verify the composition of Board and its impact on compliance.

• d) Since High Limited is a public limited company, its Board composition has to be compulsorily verified by the auditor.

MCQ--AC.7

The auditor should ensure that the board of directors of the top 1000 (2000 from April 20) listed entities shall comprise of –

(CNO-ACCG.200)

• a) Not less than 7 directors.

• b) Not less than 4 directors.

• c) Not less than 6 directors.

• d) Not less than 2 directors

MCQ--AC.8

XYZ Ltd. is a Public Limited Company engaged in the manufacturing of TMT Bars. M/s. UV & Associates are the statutory auditors of XYZ Ltd. for the Financial Year 2021-22. The company is listed on National Stock Exchange. CA Udhav, the engagement partner is considering the requirements with respect to Regulation 27 and Schedule II (LODR) for corporate governance compliance of XYZ Ltd. Which of the following is correct in this regard?

(CNO-ACCG.120)

• a) XYZ Ltd. shall submit a quarterly compliance report on corporate governance in the format as specified by its Board from time to time to NSE within 21 days from end of each quarter. The report shall be signed either by the Compliance Officer or the Chief Executive Officer of XYZ Ltd.

• b) XYZ Ltd. shall submit a monthly compliance report on corporate governance in the format as specified by its Board from time to time to NSE within 21 days from the end of the month. The report shall be signed either by the General Manager of the accounts department of XYZ Ltd.

• c) XYZ Ltd. shall submit a quarterly compliance report on corporate governance in the format as specified by its Board from time to time to NSE within 30 days from the close of quarter. The report shall be signed either by the Compliance Officer or the Chief Executive Officer of XYZ Ltd.

• d) XYZ Ltd. shall submit the annual compliance report on corporate governance in the format as specified by its Board from time to time to NSE within 30 days from the year end. The report shall be signed either by the General Manager of the Accounts Department of the Company.

MCQ--AC.9

"As per Regulation 20 and Part D of Schedule II of SEBI (LODR) Regulations, 2015, who among the following shall be appointed as Chairman of Stakeholder Relationship Committee?

(CNO-ACCG.280)

• a) Small Shareholder Director

• b) Whole time director

• c) Any of the Executive Director

• d) Any of the Non-Executive Director"

MCQ--AC.10

RST Ltd. has a Net Worth of ` 80 crore and a market capitalisation of `350 crore. However, its ranking is 800 among all the Listed Companies based on the said capital for the previous year. It has a subsidiary Company PQR Pvt Ltd. whose net worth is ` 25 crore. Whether RST Ltd. and PQR Ltd. are required to undertake Secretarial Audit?

(CNO-ACCG.420)

• a) Both RST Ltd. and PQR Ltd. shall undertake Secretarial Audit.

• b) Only RST Ltd., being a listed entity, is required to undertake Secretarial Audit.

• c) None of them are required to undertake Secretarial Audit since they are not among the top 500 Companies on the basis of Market Capitalisation.

• d) Only RST Ltd. shall undertake Secretarial Audit since it is among the top 1,000 Companies on the basis of Market Capitalisation.

MCQ--AC.11

M/s Shiva & Associates have been appointed as statutory auditors of Kailash Ltd. which is the company registered under Section 8 of the Companies Act 2013. During the course of aud it, CA Shiva noticed that the Board of Directors have held their meetings only twice, in the financial year under audit. How should CA Shiva deal with the same in the compliance certificate to be issued by him?

(CNO-Unique)

• a) CA Shiva should give an adverse statement stating that the meeting of board of directors were held only twice as against the minimum requirement of 4 meetings of financial year.

• b) CA Shiva need not mention regarding the same in the compliance certificate as there is no minimum requirement of meeting of board of directors in case of companies registered under Section 8.

• c) Kailash Ltd. being a company registered under Section 8 of the Companies Act 2013 is exempt from obtaining compliance certificate from the statutory auditors.

• d) Kailash Ltd. is correct in conducting two meeting of board of directors therefore, CA Shiva should not give an adverse or qualified statement in this regard