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CMA Final · Cost and Management Audit · Companies (Cost Records and Audit) Rules, 2014

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

The qualifications, disqualifications, rights, duties and obligations applicable to auditors under the Chapter apply to the cost auditor so far as applicable, per section 148(5). The cost auditor must also follow cost auditing standards and can be punished for default.

  1. AThe cost auditor is exempt from the rights and duties applicable to auditors under the Chapter
  2. BThe cost auditor need not follow any standards because cost audit is voluntary
  3. CThe qualifications, disqualifications, rights, duties and obligations of auditors under the Chapter apply to the cost auditor so far as applicableCorrect
  4. DOnly the company's officers, and not the cost auditor, are liable to punishment for default

Explanation

Section 148(5) applies the qualifications, disqualifications, rights, duties and obligations of auditors under the Chapter to the cost auditor so far as applicable. Section 148(3) also requires compliance with cost auditing standards, and section 148(8)(b) makes a defaulting cost auditor punishable.

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