Auditing : Practice Questions and Answers

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.

The correct answer is D. Section 143 of the Companies Act, 2013 covers the rights and duties of an auditor.

Key rights include: right to access books and records, right to be present at board meetings, right to ask questions, and right to report to the board.

Key duties include: duty to be independent, duty to exercise due care and skill, and duty to report on the company's financial statements.