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CMA Final · Cost and Management Audit · Basics of Cost Audit

Which of the following persons is barred by section 148 of the Companies Act, 2013 from being appointed to conduct the audit of cost records of a company?

A person appointed under section 139 as the company's auditor cannot be appointed to conduct the audit of cost records. This keeps the financial audit and the cost audit separate, whereas Board appointment, standards compliance and member-determined remuneration are all part of the permitted process.

  1. AA cost accountant appointed by the Board
  2. BA person appointed under section 139 as an auditor of the companyCorrect
  3. CA cost accountant who complies with the cost auditing standards
  4. DA cost accountant remunerated as determined by the members

Explanation

The first proviso to section 148(3) says no person appointed under section 139 as the company's auditor shall be appointed for the audit of cost records. The other options describe the normal, permitted process: Board appointment, compliance with standards, and remuneration fixed by members.

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