CMA Intermediate · Corporate Accounting and Auditing · Cost Audit
Vishwa Chemicals Ltd receives the cost audit report on 10 March. The report contains a reservation regarding allocation of utilities. Within what time must the company furnish the Central Government with the report along with full information and explanation on the reservation, and to whom was the report originally submitted by the cost accountant?
The cost accountant submits the report to the Board of Directors, and the company must furnish it to the Central Government within thirty days of receipt with explanation of every reservation. From 10 March, thirty days ends on 9 April.
- AWithin 30 days of receipt, 10 April at the latest; originally submitted to the Board of Directors
- BWithin 30 days of receipt, 9 April at the latest; originally submitted to the Board of DirectorsCorrect
- CWithin 30 days of receipt, 9 April at the latest; originally submitted to the members
- DWithin 60 days of receipt; originally submitted to the Central Government
Explanation
Section 148(5) proviso requires the cost accountant to submit the report to the Board of Directors. Section 148(6) requires the company to furnish it to the Central Government within thirty days from the date of receipt, with information and explanation on every reservation. Counting 30 days from 10 March (21 days left in March plus 9 days in April) gives 9 April. Option 10 April miscounts by one day.
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