Page 109 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(c). Not less than one year has at the date of such issue, elapsed since the date on which the company
has commenced business
(d). Where the equity shares of the company are listed on recognized stock exchange, the shares are
issued in accordance with requirements by SEBI."
IV. "Which of the following is not correct:-
(a). Section 52- Securities Premium Account
(b). Section 53- Issue of shares at discount
(c). Section 54- Issue of Bonus Shares
(d). Section 68- Buyback of shares"
V. "With respect to which of the following, passing of a Special Resolution is required by a company:-

(a). Issue of Sweat Equity Shares
(b). Reduction of Share Capital
(c). Both a & b
(d). None of a & b"

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• Venus Ltd. is a public limited company having turnover of ` 150 crores during the current
financial year i.e. FY 2019-20 which is the first financial year for the company after its
registration.
• M/s AMR & Associates are appointed as the first auditors of Venus Ltd.
• M/s AMR & Associates is having partners Mr. A, Mr. M, Mr. R all Chartered Accountants.
• Mr. A, Mr. M, Mr. R are holding appointment as auditors in 10, 15, 20 companies respectively.
The above numbers are after taking into account appointment of M/s AMR & Associates as
auditors in Venus Limited.
• During the course of audit, the auditors understand that since Venus Ltd is a public limited
company, their duty is to also report on the adequacy of internal financial control of Venus Ltd
• Further, Venus Ltd holds 20% equity share capital of Mercury Ltd which has approached M/s
AMR & Associates for certain assignments namely Tax audit, Actuarial Science, Outsourced
Financial services.

Based on the above facts, answer the following:-"
I. "M/s AMR & Associates shall hold the office as auditor of Venus Ltd.:-
(a). For one term of five consecutive years
(b). Till the conclusion of first Annual General Meeting
(c). For two terms of five consecutive years.
(d). None of the above."
II. "What are the relevant provisions of the Companies Act 2013 related to the audit committee.
Whether Venus Ltd. is required to constitute an Audit Committee?
(a). Section 167, No
(b). Section 117, Yes
(c). Section 177, Yes
(d). Section 176, No"
III. "What is the maximum number of audits remaining in the name of M/s AMR & Associates:-
(a). 60
(b). 25
(c). 10
(d). 15
IV. "In case of a private company, under section 143(3)(i), the auditor has no duty to report on the
internal financial control of the Company if turnover and aggregate borrowings are less than
certain amount. What is the limit of Turnover and aggregate borrowings from bank or financial
institutions or anybody corporate. :-
(a). 50 crore and ` 25 crore

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