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Apart from the first auditor appointed by the board, how is a company auditor’s remuneration fixed under section 142(1) of the Companies Act, 2013?

Question and options

Apart from the first auditor appointed by the board, how is a company auditor’s remuneration fixed under section 142(1) of the Companies Act, 2013?

  1. By the members in general meeting, or as they determine

  2. By the audit committee, at its own discretion

  3. By the board, on the audit committee’s recommendation

  4. By the Central Government, under a notified scale

Answer and explanation

Correct answer: A - By the members in general meeting, or as they determine

Section 142(1) of the Companies Act, 2013 requires the remuneration of the auditor to be fixed by the company in general meeting or in such manner as may be determined in it; the proviso lets the board fix the remuneration of a first auditor it appoints. In companies with an audit committee, the committee only recommends the auditor’s remuneration under section 177(4); the decision still rests with the general meeting.

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