Page 107 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(6) Notwithstanding anything contained in sub-section (1), the first auditor of a company, other than a
Government company, shall be appointed by the Board of Directors within thirty days from the date of
registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform
the members of the company, who shall within ninety days at an extraordinary general meeting appoint
such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.
(7) Notwithstanding anything contained in sub-section (1) or sub-section (5), in the case of a
Government company or any other company owned or controlled, directly or indirectly, by the Central
Government, or by any State Government, or Governments, or partly by the Central Government and
partly by one or more State Governments, *the first auditor shall be appointed by the Comptroller and
Auditor-General of India within sixty days from the date of registration of the company and in case the
Comptroller and Auditor-General of India does not appoint such auditor within the said period, the
Board of Directors of the company shall appoint such auditor within the next thirty days; and in the case
of failure of the Board to appoint such auditor within the next thirty days, it shall inform the members
of the company who shall appoint such auditor within the sixty days at an extraordinary general
meeting, who shall hold office till the conclusion of the first annual general meeting.
(8) Any casual vacancy in the office of an auditor shall—
(i) in the case of a company other than a company whose accounts are subject to audit by an auditor
appointed by the Comptroller and Auditor-General of India, be filled by the Board of Directors within
thirty days, but if such casual vacancy is as a result of the resignation of an auditor, such appointment
shall also be approved by the company at a general meeting convened within three months of the
recommendation of the Board and he shall hold the office till the conclusion of the next annual general
meeting;
(ii) in the case of a company whose accounts are subject to audit by an auditor appointed by the
Comptroller and Auditor-General of India, be filled by the Comptroller and Auditor-General of India
within thirty days:
Provided that in case the Comptroller and Auditor-General of India does not fill the vacancy within the
said period, the Board of Directors shall fill the vacancy within next thirty days.
(9) Subject to the provisions of sub-section (1) and the rules made thereunder, a retiring auditor may be
re-appointed at an annual general meeting, if—
(a) he is not disqualified for re-appointment;
(b) he has not given the company a notice in writing of his unwillingness to be re-appointed; and
appointing some other auditor or providing expressly that he shall not be re-appointed.
(10) Where at any annual general meeting, no auditor is appointed or re-appointed, the existing auditor
shall continue to be the auditor of the company.
(11) Where a company is required to constitute an Audit Committee under section 177, all
appointments, including the filling of a casual vacancy of an auditor under this section shall be made
after taking into account the recommendations of such committee.”
* Responsibility to Inform C&AG
In light of above information, guide your friend and remove his dilemmas by answering the following
questions correctly: -"
I. "Section 139 prescribes that before appointment of an auditor, certificate is to be obtained from
auditor that appointment, if made, shall be in accordance with certain conditions. Which of the
following is not such condition in case of a listed public company?
(a). the individual or the firm, as the case may be, is eligible for appointment and is not disqualified
for appointment under the Act, the Chartered Accountants Act, 1949 and the rules or regulations
made thereunder;
(b). the proposed appointment is as per the term provided under the Act;
(c). the proposed appointment is within the limits laid down by or under the authority of the Act;
(d). the proposed appointment is as per regulations of SEBI"
II. "The provisions of rotation of auditors are not applicable to certain class of companies. Which of
the following is not a correct option?

(a). all unlisted public companies having paid up share capital up to a certain limit
(b). all private limited companies having paid up share capital up to a certain limit
(c). all unlisted public companies having paid up share capital and reserves up to a certain limit
(d). all companies having public borrowings from banks up to a certain limit"

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