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CMA Final · Cost and Management Audit · Preparation and Filing of Cost Audit Report

Which combination correctly describes consequences under Section 148 when default is made in complying with its provisions?

Under Section 148(8), the company and every officer in default are punishable in the manner provided in section 147(1), while a defaulting cost auditor is punishable under section 147(2) to (4). Both the company side and the auditor side face separate penal provisions.

  1. AThe company and every officer in default are punishable under section 147(1), and the defaulting cost auditor under section 147(2) to (4)Correct
  2. BOnly the company is punishable, and the cost auditor is exempt
  3. COnly the cost auditor is punishable, and the company is exempt
  4. DThe company and cost auditor are both punishable only under section 147(1)

Explanation

Section 148(8)(a) makes the company and every officer in default punishable as provided in section 147(1). Section 148(8)(b) makes the defaulting cost auditor punishable as provided in section 147(2) to (4). Hence the separate provisions for the company and the auditor distinguish the correct option from the others.

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