CMA Final · Cost and Management Audit · Cost Auditor
Sunrise Textiles Ltd received the cost audit report on 5 March. The report contains a qualification about inadequate cost records for one product line. Under section 148 of the Companies Act, 2013, what must the company do?
The company must furnish the cost audit report to the Central Government within thirty days of receiving it, with full information and explanation on every reservation or qualification. Section 148(6) places this duty on the company, not the auditor, and it does not depend on any request or on materiality.
- AFurnish the Central Government with the report and full information and explanation on every reservation or qualification within thirty days of receiving itCorrect
- BFurnish the report only if the Central Government asks for it in writing
- CAsk the cost auditor to file the report with the Central Government within thirty days
- DFurnish the report to the Central Government within thirty days, with explanations required only for material qualifications
Explanation
Section 148(6) places the duty on the company to furnish the Central Government with the report within thirty days from receipt of a copy, along with full information and explanation on every reservation or qualification. Filing is not left to the auditor, and the duty arises without any request. Explanations are required for every qualification, not only material ones.
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