Auditing Fundamentals

Who is responsible for approving financial statements before they are submitted?

• A) The CFO

• B) The shareholders

• C) The Board of Directors

• D) The Registrar of Companies

2. Which companies must prepare consolidated financial statements (CFS)?

• A) Any company with one or more subsidiaries, associates, or joint ventures
  

• B) Only listed companies

• 
  C) Only public companies

• 
  D) Only companies with foreign subsidiaries

A company falsely reports high revenues to secure a bank loan. Under which section can it be penalized?

• A) Section 128
  

• B) Section 134
  

• C) Section 447

• 
  D) Section 137
  

Which companies must appoint an internal auditor ?

• A) All companies
  

• B) Listed companies and certain prescribed private and public companies
  

• C) Only government-owned companies
  

• D) Companies with more than ₹500 crore turnover

DEF Ltd. fails to file its financial statements with the ROC within the prescribed time. What is the penalty?

• A) ₹1 lakh fine
  

• B) ₹10,000 plus ₹100 per day delay

• 
  C) No penalty if filed within 6 month

• 
  D) ₹50,000 lump sum fine

Can a listed company avoid publishing its financial statements on its website?

• A) Yes, if they are filed with the ROC

• 
  B) No, listed companies must publish financials on their website

• 
  C) Yes, if they distribute hard copies to shareholders

• 
  D) Yes, if an AGM is conducted

Which of the following companies is required to comply with CSR provisions?

• A) A company with a net profit of ₹2 crore

• 
  B) A company with a turnover of ₹500 crore

• C) A company with a net worth of ₹500 crore

• D) Both B and C

RST Ltd. prepares a Board’s Report but does not disclose related party transactions. Is this compliant?

• A) Yes, Board’s Report does not require such disclosures
  

• B) No, Board’s Report must disclose related party transactions
  

• C) Yes, if the shareholders are informed separately
  

• D) No, but no penalty applies

Which companies come under the regulatory purview of NFRA for accounting and auditing standards?

• A) Listed companies and large public interest entities
  

• B) Only private companies
  

• C) All startups
  

• D) Sole proprietorships

PQR Ltd. prepares financial statements without following prescribed accounting standards. The auditors highlight the issue, but the company proceeds with the filings.

Which of the following is true?

• A) The company is compliant as long as it explains the deviation.

• B) The Board can override accounting standards

• 
  C) Private companies are exempt from this requirement.

• D) The company violates Section 129 as it must follow prescribed accounting standards.