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CMA Intermediate · Corporate Accounting and Auditing · Statutory Audit under the Companies Act, 2013

Under section 148 as reproduced, which of the following correctly describes the position of an auditor appointed under section 139 in relation to the audit of cost records of the same company?

The statutory auditor appointed under section 139 cannot be appointed to audit the cost records of the same company. The first proviso to section 148(3) bars it, and no Board or member approval can override it.

  1. ASuch a person may be appointed as cost auditor if the Board approves
  2. BSuch a person may be appointed as cost auditor if the members approve
  3. CSuch a person may be appointed as cost auditor only for companies below the prescribed turnover
  4. DSuch a person shall not be appointed for conducting the audit of cost recordsCorrect

Explanation

The first proviso to section 148(3) says that no person appointed under section 139 as an auditor of the company shall be appointed for conducting the audit of cost records. Neither Board nor member approval removes this bar.

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