Accounting Multiple Choice Question – 10 August 2025

A business consultant called Keith has made the two statements relating to the statutory auditor provisions of the Companies Act 2006.

Statement 1 – An individual or firm is eligible for appointment as statutory auditor if the individual or firm is a member of a recognised supervisory body and is eligible for appointment under the rules of that body.

Statement 2 – A person may NOT act as a statutory auditor if that person is an officer or employee of the audit client.

Are the statements true or false?

Select ONE answer:

1. Statement 1 – True and Statement 2 – False
2. Statement 1 – False and Statement 2 – True
3. Statement 1 – True and Statement 2 – True
4. Statement 1 – False and Statement 2 – False

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == >    As per Companies Act, 2006, a statutory auditor must be a member of a recognised supervisory body and an officer or employee of the client is ineligible as auditor.
4. Not correct

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