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CMA Final · Cost and Management Audit · Basics of Cost Audit

A company covered by a cost audit order under section 148(2) receives the cost audit report prepared by its cost auditor. Which statement about the subsequent steps is correct as per section 148?

The company must furnish the cost audit report to the Central Government within thirty days from receiving a copy, along with full information and explanation on every reservation or qualification. The Government may still call for further information or explanation afterwards under section 148(7).

  1. AThe company must furnish the report to the Central Government within thirty days of receiving a copy, with full information and explanation on every reservation or qualificationCorrect
  2. BThe cost auditor must himself file the report with the Central Government within thirty days of appointment
  3. CThe company need furnish the report to the Central Government only if the Board disagrees with a qualification
  4. DThe Central Government cannot ask for further information once the company has furnished the report

Explanation

Section 148(6) places the duty on the company to furnish the report to the Central Government within thirty days of receiving a copy, along with full information and explanation on every reservation or qualification. Section 148(7) lets the Government call for further information, so the last option is wrong. The duty is on the company, not the auditor, and does not depend on Board disagreement.

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