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CS Professional · Labour Laws and Practice · Industrial and Labour Laws Audit

Sunrise Textiles Ltd, Surat, wants its Company Secretary to check whether wage payments, working conditions and social security contributions follow the applicable labour codes. Which description best fits this exercise?

The exercise is a labour law audit: a systematic, independent review of whether the establishment complies with applicable labour laws on wages, working conditions, industrial relations and social security. It differs from statutory, cost or forensic audits, which examine financial statements, cost records or suspected fraud.

  1. AA labour law audit, which is a systematic review of compliance with labour legislationCorrect
  2. BA statutory audit of the financial statements under the Companies Act
  3. CA cost audit of the production records
  4. DA forensic audit of suspected fraud in procurement

Explanation

A labour law audit is an independent, systematic review of whether an establishment complies with applicable labour laws, covering wages, working conditions, industrial relations and social security. The other options address financial statements, cost records or fraud, which are different audit types with different objectives.

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