CMA Intermediate · Corporate Accounting and Auditing · Cost Audit
Which statement about the appointment of a cost auditor under Section 148 is correct?
The Board appoints the cost auditor, while the remuneration is determined by the members in the prescribed manner. Section 148(3) says this, and it also bars the company's Section 139 statutory auditor from being appointed for cost audit.
- AThe Board appoints the cost auditor, and the remuneration is determined by the members in the prescribed mannerCorrect
- BThe members appoint the cost auditor, and the Board fixes the remuneration
- CThe company's statutory auditor under Section 139 may also be appointed as cost auditor
- DThe Central Government appoints the cost auditor and fixes the remuneration
Explanation
Section 148(3) provides that the cost accountant is appointed by the Board on remuneration determined by the members in the prescribed manner. The first proviso bars a person appointed under Section 139 as the company's auditor from being appointed for cost audit, so the option allowing this is wrong.
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