Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Statutory Audit under the Companies Act, 2013

Which statement about the cost auditor appointed under section 148 is correct?

The cost auditor must comply with cost auditing standards issued by the Institute of Cost Accountants of India with the Central Government's approval, as stated in the proviso and Explanation to section 148(3).

  1. AThe cost auditor need not follow any standards, as cost auditing standards are only advisory
  2. BThe cost auditor must comply with cost auditing standards issued by the Institute of Cost Accountants of India with the approval of the Central GovernmentCorrect
  3. CThe cost auditor is exempt from the qualifications and disqualifications applicable to auditors under the Chapter
  4. DThe cost auditor is not entitled to any assistance or facilities from the company

Explanation

The second proviso to section 148(3) requires compliance with cost auditing standards, defined in the Explanation as standards issued by the Institute with Central Government approval. Section 148(5) also applies the auditors' qualifications, disqualifications, rights and duties so far as applicable, and obliges the company to give all assistance and facilities.

Did you get it right without looking?

One question tells you little. A timed set on Statutory Audit under the Companies Act, 2013 shows your real accuracy, how long you take and where you lose marks.

Practise Statutory Audit under the Companies Act, 2013Free diagnostic mock

More Statutory Audit under the Companies Act, 2013 questions