Companies Act Audit Provisions MCQs 2026

Directors responsibility for accounts is best described as

1. A only auditor prepares FS alone ✓
2. B directors responsible for preparation of FS and internal control ✓
3. C only company secretary liable never directors ✓
4. D shareholders draft FS before directors ✓

Companies Act Audit Provisions: Auditor rights Section 237 can be defined as

1. A two hours per year only ✓
2. B access at all times to books accounts and vouchers and to require information ✓
3. C only with court order each visit ✓
4. D no right to ask questions of staff ✓

Regarding Subsidiary audit consolidation in Companies Act Audit Provisions, the accurate view is

1. A group FS consolidate subsidiaries per applicable accounting standards ✓
2. B ignore all subsidiaries ✓
3. C only parent accounts always sufficient for group ✓
4. D never audit components ✓

In Companies Act Audit Provisions, Audit committee Companies Act primarily means

1. A audit committee prohibited ✓
2. B listed companies require audit committee with independent members ✓
3. C only CEO alone is committee ✓
4. D committee replaces board entirely ✓

Companies Act Audit Provisions: Books of account electronic form can be defined as

1. A only handwritten ledgers legal ✓
2. B electronic records permitted if accessible and reproducible ✓
3. C delete all electronic records immediately ✓
4. D cloud records never acceptable ✓

Auditor report Section 241 in the context of Companies Act Audit Provisions refers to

1. A report only to CEO privately ✓
2. B oral report in cafeteria sufficient ✓
3. C report to members on accounts examined ✓
4. D no written report required ✓

Which statement about Rotation of audit firm is correct

1. A SECP rules require mandatory rotation for public interest companies ✓
2. B never rotate in Pakistan ✓
3. C rotate only audit clerk not firm ✓
4. D same firm for 100 years mandatory ✓

Prohibited non-audit services for audit client is best described as

1. A unlimited NAS always allowed ✓
2. B auditor may be CEO of client ✓
3. C internal audit outsourcing always unrestricted ✓
4. D certain services restricted under corporate governance regulations ✓

In Companies Act Audit Provisions, Financial statements approval primarily means

1. A auditor approves before directors see FS ✓
2. B FS never approved by board ✓
3. C directors approve FS before auditor report finalized ✓
4. D only marketing team approves ✓

Companies Act Audit Provisions: Secretarial compliance certificate can be defined as

1. A auditor signs this certificate always ✓
2. B never required for listed companies ✓
3. C CEO and company secretary certify compliance with Act and governance code ✓
4. D only for partnerships ✓

In Companies Act Audit Provisions, Winding up and auditor role primarily means

1. A auditor automatically liquidator always ✓
2. B no accounts in winding up ✓
3. C only criminal court prepares FS ✓
4. D auditor may be involved in final accounts during liquidation ✓

In Companies Act Audit Provisions, Companies Act 2017 Section 228 primarily means

1. A no books required for companies ✓
2. B only verbal records sufficient ✓
3. C company must keep proper books of account at registered office ✓
4. D only social media posts as accounts ✓

Regarding Auditor qualification under Companies Act in Companies Act Audit Provisions, the accurate view is

1. A any friend of director ✓
2. B only foreign citizen without license ✓
3. C company employee always eligible while employed ✓
4. D person qualified under Act including chartered accountant ✓

Companies Act Audit Provisions: Related party transactions disclosure can be defined as

1. A hide all related party transactions ✓
2. B Companies Act and IFRS require disclosure of related party dealings ✓
3. C only disclose to auditor secretly ✓
4. D no disclosure in annual report ✓

Penalty for false statement to auditor in the context of Companies Act Audit Provisions refers to

1. A no penalty for lying to auditor ✓
2. B only civil marketing fine ✓
3. C auditor penalized for client lie ✓
4. D officers making false statements liable under Companies Act ✓

Branch registration and audit is best described as

1. A branches exempt from all Pakistan law ✓
2. B never file branch accounts ✓
3. C foreign company branch must register and comply with local filing ✓
4. D only audit parent in home country always sufficient ✓

In Companies Act Audit Provisions, Dormant company provisions primarily means

1. A dormant means trading actively ✓
2. B never any filing for any company ✓
3. C full audit always regardless of dormancy without exception ✓
4. D dormant company meeting definition may have reduced filing obligations ✓

Regarding Remuneration of auditor disclosure in Companies Act Audit Provisions, the accurate view is

1. A amount paid to auditor disclosed in annual report ✓
2. B secret fee never disclosed ✓
3. C only paid in kind hidden ✓
4. D disclosure optional always ✓

Which statement about Investigation by SECP is correct

1. A SECP never investigates companies ✓
2. B SECP may investigate company affairs including audit failures ✓
3. C only ICAP investigates all companies always instead of SECP ✓
4. D investigation requires shareholder unanimity always ✓

Regarding Auditor appointment Section 233 in Companies Act Audit Provisions, the accurate view is

1. A auditor appointed in general meeting for term until next AGM ✓
2. B CEO permanent auditor appointment ✓
3. C SECP picks individual shareholder as auditor always ✓
4. D never removed or changed ✓