Question 1:

Under the Companies Act 2013, what is the minimum number of directors required for a public company?

A) 2
B) 3
C) 4
D) 5
E) 7

Answer: B) 3
Explanation: A public company must have a minimum of three directors as per the Companies Act 2013.

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Question 2:

What is the primary purpose of a Statutory Audit?

A) To evaluate the internal controls of the organization.
B) To ensure compliance with tax laws.
C) To provide assurance that the financial statements are free from material misstatement.
D) To assess the efficiency of operations.
E) To identify fraud within the company.

Answer: C) To provide assurance that the financial statements are free from material misstatement.
Explanation: The primary purpose of a statutory audit is to ensure that the financial statements present a true and fair view of the company’s financial position.

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Question 3:

Which of the following is not a requirement for a valid board meeting under the Companies Act 2013?

A) Notice of the meeting must be given to all directors.
B) A quorum must be present.
C) The meeting must be held within India.
D) Minutes of the meeting must be recorded.
E) The meeting must be held at the registered office of the company.

Answer: C) The meeting must be held within India.
Explanation: While it is common for meetings to be held in India, the Companies Act does not explicitly require board meetings to be held within India.

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Question 4:

Which of the following provisions applies to a company limited by shares?

A) The liability of members is limited to the amount unpaid on shares held by them.
B) Members have unlimited liability.
C) The company can issue only equity shares.
D) Members cannot transfer shares.
E) The company has a fixed capital structure.

Answer: A) The liability of members is limited to the amount unpaid on shares held by them.
Explanation: In a company limited by shares, the liability of the members is limited to the unpaid amount on their shares.

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Question 5:

What is the maximum time frame allowed for filing an annual return with the Registrar of Companies (ROC) after the conclusion of the Annual General Meeting (AGM)?

A) 30 days
B) 60 days
C) 90 days
D) 120 days
E) 150 days

Answer: B) 60 days
Explanation: The annual return must be filed within 60 days from the date of the AGM.

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Question 6:

In the context of auditing, what does the term “materiality” refer to?

A) The relevance of information presented in financial statements.
B) The threshold above which missing or inaccurate information could influence decisions of users.
C) The likelihood of detecting fraud in the financial statements.
D) The requirement to maintain accurate books of accounts.
E) The ability of auditors to provide an unqualified opinion.

Answer: B) The threshold above which missing or inaccurate information could influence decisions of users.
Explanation: Materiality is a concept in auditing that determines the significance of an amount, transaction, or discrepancy in financial statements.

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Question 7:

Under the Companies Act 2013, who is responsible for the appointment of an auditor in a company?

A) Board of Directors
B) Shareholders in the Annual General Meeting
C) Company Secretary
D) Registrar of Companies
E) Auditors themselves

Answer: B) Shareholders in the Annual General Meeting
Explanation: The appointment of an auditor is made by the shareholders during the Annual General Meeting.

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Question 8:

Which of the following statements is true regarding related party transactions as per the Companies Act 2013?

A) All related party transactions require approval by the board of directors.
B) Related party transactions must be disclosed only in the annual report.
C) Approval from the Audit Committee is mandatory for all related party transactions.
D) Related party transactions can be conducted without any disclosures if they are within ordinary course of business.
E) Related party transactions are exempt from the provisions of the Companies Act.

Answer: C) Approval from the Audit Committee is mandatory for all related party transactions.
Explanation: The Companies Act requires approval from the Audit Committee for related party transactions to ensure transparency and accountability.

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Question 9:

What is the penalty for a company failing to comply with the provisions of Section 92 (Annual Return) of the Companies Act 2013?

A) ₹50,000
B) ₹1,00,000
C) ₹5,00,000
D) ₹10,00,000
E) ₹25,00,000

Answer: C) ₹5,00,000
Explanation: The penalty for non-compliance with Section 92 can extend to ₹5,00,000 for the company, and every officer who is in default may be liable to a fine.

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Question 10:

Which type of audit is conducted to verify the authenticity and accuracy of a company’s financial statements?

A) Internal Audit
B) Management Audit
C) Compliance Audit
D) Forensic Audit
E) Statutory Audit

Answer: E) Statutory Audit
Explanation: A statutory audit is performed to verify the accuracy and authenticity of a company’s financial statements as per legal requirements.