Who appoints the internal auditor of a company that is required by section 138 of the Companies Act, 2013 to have one?
Question and options
Who appoints the internal auditor of a company that is required by section 138 of the Companies Act, 2013 to have one?
The Central Government, on the company’s application
The board of directors, by resolution at a board meeting
The statutory auditor, with the consent of the board
The members, by ordinary resolution at a general meeting
Answer and explanation
Section 138 of the Companies Act, 2013 requires prescribed companies to appoint an internal auditor, and rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014, read with section 179(3), says the power to appoint internal auditors may be exercised by the board only by resolution passed at a board meeting. Unlike the statutory auditor, the internal auditor is not appointed by members at a general meeting.
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