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CMA Final · Cost and Management Audit · Companies (Cost Records and Audit) Rules, 2014

A company covered by a cost audit order receives the cost audit report on 12 March from its cost auditor, which contains a qualification about the allocation of overheads. Which course of action is consistent with section 148 of the Companies Act, 2013?

The company must furnish the cost audit report to the Central Government within thirty days from the date it receives the report, along with full information and explanation on every reservation or qualification. The period runs from receipt, and the duty is not limited to monetary qualifications.

  1. AFurnish the report to the Central Government within thirty days of receipt, with full information and explanation on the qualificationCorrect
  2. BFurnish the report within thirty days of the close of the financial year, without any explanation
  3. CFurnish the report only if the Central Government calls for it
  4. DFurnish the report to the Central Government within ninety days, with explanation only for monetary qualifications

Explanation

Section 148(6) requires the company to furnish the report within thirty days from the date of receipt of a copy, along with full information and explanation on every reservation or qualification. The period runs from receipt, not from year end. Explanation is required for every qualification, not only monetary ones. Section 148(7) lets the Government seek further information afterwards.

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