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CMA Intermediate · Corporate Accounting and Auditing · Cost Audit

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

The cost audit is conducted in addition to the audit under section 143, as section 148(4) states. It does not replace the statutory audit. The cost auditor must also comply with cost auditing standards, and remuneration is determined by the members, not the Central Government.

  1. AIt replaces the audit under section 143 for companies covered by a cost audit order
  2. BIt is conducted in addition to the audit conducted under section 143Correct
  3. CIt is conducted by a cost accountant who need not follow cost auditing standards
  4. DIt is conducted by an auditor whose remuneration is fixed by the Central Government

Explanation

Section 148(4) states that an audit under this section shall be in addition to the audit under section 143, so it does not replace it. The second proviso to section 148(3) requires the cost auditor to comply with cost auditing standards. Remuneration is determined by the members in the prescribed manner, not fixed by the Central Government.

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