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CMA Final · Cost and Management Audit · Preparation and Filing of Cost Audit Report

A cost auditor of a company defaults in complying with section 148. Which consequence follows under section 148(8) of the Companies Act, 2013?

The cost auditor in default is punishable under section 147(2) to (4), while the company and every officer in default are punishable under section 147(1). Section 148(8) separates the two, so both the company and the cost auditor can be penalised, each under its own provisions.

  1. AThe cost auditor is punishable in the manner provided in sub-sections (2) to (4) of section 147, while the company and its officers in default are punishable under sub-section (1) of section 147Correct
  2. BThe cost auditor is punishable under sub-section (1) of section 147, while the company is punishable under sub-sections (2) to (4) of section 147
  3. COnly the company and its officers are punishable, since the cost auditor acts as the Board's agent
  4. DOnly the cost auditor is punishable, as the default relates to the audit report

Explanation

Section 148(8)(a) makes the company and every officer in default punishable under section 147(1). Clause (b) makes the cost auditor in default punishable under section 147(2) to (4). The reversed pairing and the single-party options misstate this split.

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