What is the prime objective of an audit in view of Section 129 (1) of Companies Act 2013?
To ascertain that the financial statements show true and fair view of its financial position and earnings
To complete the audit at the earliest
To sign the financial statement
To only check few things without going into details even if there is a suspicion
Ensuring internal control efficiency
View Answer
Correct Answer: A — To ascertain that the financial statements show true and fair view of its financial position and earnings
Explanation:
The correct answer is A. The prime objective of an audit under Section 129(1) of the Companies Act, 2013 is to ascertain that the financial statements show a true and fair view of the company's financial position and earnings.
Section 129(1) mandates that financial statements comply with accounting standards under Section 133 and be presented in the form prescribed under Schedule III.
Violation of Section 129 attracts a fine of ₹50,000 to ₹25,00,000 for the company, and imprisonment up to three years or fine of ₹50,000 to ₹5,00,000 for defaulting officers.