Module: | SEBI LODR & Corporate Governance Frameworks
Q16: Consider the following statements regarding the mandatory Joint Audit framework for large Non-Banking Financial Companies (NBFCs) updated for 2025-2026:
1. NBFCs with an asset size of Rupees 15,000 Crore and above are required to appoint a minimum of two joint statutory auditors.
2. The joint auditors appointed by the NBFC must not belong to the same network of audit firms.
3. Both joint auditors can be retired and replaced simultaneously at the end of their tenure to ensure a clean transition.
Which of the above statements is/are incorrect?
2. The joint auditors appointed by the NBFC must not belong to the same network of audit firms.
3. Both joint auditors can be retired and replaced simultaneously at the end of their tenure to ensure a clean transition.
Which of the above statements is/are incorrect?
✅ Correct Answer: C
🎯 Quick Answer:
C. Only 3 is incorrect.Structural Breakdown: Statement 1 is correct.
Statement 2 is correct.
Statement 3 is incorrect; the guidelines state that joint auditors must be appointed on a rotational basis so they do not retire in the same year.
Historical/Related Context: The RBI introduced these norms following liquidity crises in the shadow banking sector.
Causal Reasoning: Preventing simultaneous retirement ensures institutional memory and continuity.