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

Regarding the standards a cost auditor must follow under section 148(3) of the Companies Act, 2013, which statement is correct?

The cost auditor must comply with cost auditing standards, which section 148(3) defines as standards issued by the Institute of Cost Accountants of India with the approval of the Central Government. Compliance is a statutory requirement and does not depend on Board direction or personal choice.

  1. AThe cost auditor must comply with cost auditing standards issued by the Institute of Cost Accountants of India with the approval of the Central GovernmentCorrect
  2. BThe cost auditor must follow standards issued by the Central Government alone without reference to the Institute
  3. CThe cost auditor may choose any auditing standard accepted internationally
  4. DThe cost auditor need follow standards only if the Board directs

Explanation

The second proviso and Explanation to section 148(3) require compliance with cost auditing standards, defined as standards issued by the Institute of Cost Accountants of India with Central Government approval. Compliance is mandatory, not optional or Board-dependent.

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