MCQ for CA Final Audit - Chapter 11 AUDIT OF NON-BANKING FINANCIAL COMPANIES

Sample Multiple Choice Questions (MCQ's) for CA Final - Paper 3 - Advanced Auditing and Professional Ethics - Chapter 11: AUDIT OF NON-BANKING FINANCIAL COMPANIES - For Practice relevant for May/Nov 23 Examinations

 

Q:1 Requirement of compulsory registration to commence or carry on the business of a NBFC is prescribed by:              

 

  1. 45-I of the RBI (Amendment) Act, 1997
  2. 45-IA of the RBI (Amendment) Act, 1997
  3. 45-IB of the RBI (Amendment) Act, 1997
  4. 45-IC of the RBI (Amendment) Act, 1997

Answer: 2

Q:2 Which of the below mentioned companies are not required to be registered with the RBI to carry on the business of a NBFC:   

 

  1. Venture Capital Fund/Merchant Banking companies/Stock broking companies registered with SEBI.
  2. Insurance Company holding a valid Certificate of Registration issued by IRDA.
  3. Housing Finance Companies regulated by National Housing Bank.
  4. All of the above.

Answer: 4

Q:3 A company desirous of commencing business of non-banking financial institution should have a minimum net owned fund of:               

 

  1. ₹ 25 lakh.
  2. ₹ 50 lakh.
  3. ₹ 100 lakh.
  4. ₹ 200 lakh.

Answer: 4

Q:4 NBFC will be classified as systemically important NBFCS if:

 

  1. asset size is of ₹ 500 Cr. or more as per last audited balance sheet.
  2. total income from financial assets is ₹500 Cr. or more for the immediately preceding financial year.
  3. asset size is of ₹ 500 Cr. or more as per last audited balance sheet and total income from financial assets is ₹500 Cr. or more for the immediately preceding financial year.
  4. asset size is of ₹ 500 Cr. or more as per last audited balance sheet or total income from financial assets is ₹ 500 Cr. or more for the immediately preceding financial year.

Answer: 1

Q:5 Rationale for classifying a NBFCs as systemically important NBFCs is that:  

 

  1. the activities of such NBFCs will have a bearing on the financial stability of the overall economy.
  2. they required relaxed norms for ease of doing business.
  3. the activities of such NBFCs will have a bearing on the financial stability of the NBFC industry.
  4. all of the above.

Answer: 1

Q:6 Asset Finance company may be defined as:               

 

  1. Companies engaged in financing of physical assets supporting productive or economic activity and income arising therefrom is not less than 60% of total income.
  2. Companies engaged in financing of physical assets may or may not support productive or economic activity and income arising therefrom is not less than 60% of total income.
  3. Companies engaged in financing of physical assets supporting productive or economic activity and income arising therefrom is not less than 50% of total income.
  4. Companies engaged in financing of physical assets may or may not support productive or economic activity and income arising therefrom is not less than 50% of total income.

Answer: 1

 

CA Final - Paper 3 - Advanced Auditing and Professional Ethics - Chapter 12   

 

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