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CS Professional · Compliance Management, Audit and Due Diligence · Concepts of Various Audits

Mehta Textiles Ltd is required to maintain cost records. The company secretary is asked where these records must be kept and for how long. Which answer is correct under the Companies (Cost Records and Audit) Rules?

Cost records must be kept at the registered office or another office decided by the Board, and preserved for at least eight years from the end of the financial year to which they relate. The shorter periods and other custodians named in the alternatives are wrong.

  1. AAt the registered office or any other office approved by the Board, for at least eight years from the end of the relevant financial yearCorrect
  2. BAt the registered office only, for at least three years from the date of the audit
  3. CAt the cost auditor's office, for at least five years from the date of the report
  4. DAt any place in India or abroad, for at least ten years from the date of filing

Explanation

Cost records are kept at the registered office or such other office as the Board decides, in written or electronic form, and preserved for not less than eight years from the end of the financial year to which they relate. The other options give wrong places or periods.

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