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CMA Final · Cost and Management Audit · Companies (Cost Records and Audit) Rules, 2014

Under section 148 of the Companies Act, 2013, which standards must a cost auditor comply with when conducting the audit of cost records?

The cost auditor must comply with cost auditing standards, which are standards issued by the Institute of Cost Accountants of India with the approval of the Central Government. Standards on Auditing of the chartered accountants' body or Board-framed standards do not satisfy this requirement.

  1. AStandards on Auditing issued by the Institute of Chartered Accountants of India
  2. BCost auditing standards issued by the Institute of Cost Accountants of India with the approval of the Central GovernmentCorrect
  3. CStandards framed by the company's Board of Directors
  4. DStandards issued by the Central Government without reference to the Institute

Explanation

The second proviso to section 148(3) requires compliance with cost auditing standards. The Explanation defines them as standards issued by the Institute of Cost Accountants of India, constituted under the Cost and Works Accountants Act, 1959, with the approval of the Central Government.

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