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CMA Final · Cost and Management Audit · Cost Auditor

As stated in section 148(3) of the Companies Act, 2013, who appoints the cost auditor and how is the remuneration fixed?

The Board appoints the cost auditor, while the members determine the remuneration in the prescribed manner. This is the arrangement in section 148(3). The reverse option, where members appoint and the Board fixes fees, is incorrect, and the Central Government does not appoint.

  1. AAppointed by the Board, with remuneration determined by the members in the prescribed mannerCorrect
  2. BAppointed by the members, with remuneration fixed by the Board
  3. CAppointed by the Central Government, with remuneration fixed by the Board
  4. DAppointed by the Audit Committee, with remuneration fixed by the Central Government

Explanation

Section 148(3) provides that the cost accountant is appointed by the Board on such remuneration as may be determined by the members in the prescribed manner. The reverse arrangement, members appointing and the Board fixing fees, is a common confusion and is wrong. The Central Government only directs the audit and does not appoint.

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