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

Which statement about the appointment of a cost auditor under section 148 of the Companies Act, 2013 is correct?

A person appointed as the company's statutory auditor under section 139 cannot be appointed to audit its cost records. Section 148(3) provides that the Board appoints the cost accountant, with remuneration decided by members, and its first proviso bars the statutory auditor from the cost audit.

  1. AA person appointed under section 139 as the company's auditor cannot be appointed to audit its cost recordsCorrect
  2. BThe company's statutory auditor may also be the cost auditor if the Board approves
  3. CThe cost auditor is appointed by the members and remunerated by the Board
  4. DThe cost auditor is appointed by the Central Government

Explanation

Section 148(3) says the cost accountant is appointed by the Board, with remuneration determined by the members in the prescribed manner. The first proviso bars a person appointed under section 139 as auditor from being appointed for cost audit. Board approval cannot override this bar.

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