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CMA Intermediate · Cost Accounting · Cost Accounting Standards (CAS 1 to CAS 24)

Which of the following best describes the status of Cost Accounting Standards in India under the Companies (Cost Records and Audit) framework?

Under the cost records and cost audit rules, covered companies must maintain cost records and conduct cost audit in compliance with applicable Cost Accounting Standards issued by ICMAI. They are not optional for cost audit and do not replace Ind AS used for financial reporting.

  1. ACost records and cost audit must comply with the notified Cost Accounting Standards, where applicableCorrect
  2. BCost Accounting Standards are optional guidelines that have no relevance to cost audit
  3. CCost Accounting Standards apply only to companies listed abroad
  4. DCost Accounting Standards replace Ind AS for financial reporting

Explanation

Cost Records and Cost Audit Rules require cost records and cost audit reports to comply with applicable CAS issued by ICMAI. They are not optional for covered companies and do not replace Ind AS.

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