Find below some of the answers of question no. 1 of PCC Audit paper May 2010. Kindly check/correct and discuss:
IV. Audit Committee====False.
Reason: Audit Committee required only if paid up capital of the company is more than 5 crore.
V. Dividend====False.
Reason: Compulsory requirement for making provisions for depreciation before payment of dividend
As desired by section 205 of the Act, no company can pay dividend in any year without charging depreciation in the profit and loss account for the current year and that there is no balance of un provided depreciation of any earlier year or years.
However, the Central Government has power to allow any company in the public interest to pay dividend for any financial year out of the profits for that year or any previous financial year without providing for depreciation. [Section 205(1)(c)] The application is required to be filed to the Central Government electronically in E-form-23AAC.
VI. Misstatement====False.
Reason: Auditor is not required to intimate regulatory. His duty is limited to informed company and shareholders via his Audit Report.
VII. AOA and MOA study by Auditor====False.
Reason: AOA and MOA study by Auditor is not requirerd as for the appointment of Auditor previous authorisation by AOA or MOA is not required.
VIII. Issue of share at discount====False
Reason: General meeting resolution is not required to issue shares at discount and special resolution is a general meeting resolution.
X. Appointment of Auditor 25% subscribed capital====False
Reason: Appointment should be made through special reolution u/s 224A. Refer section 224A
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