CMA Final · Cost and Management Audit · Cost Auditor
Which statement about the cost auditor's appointment and remuneration under section 148(3) of the Companies Act, 2013 is correct?
The Board appoints the cost auditor, and the members determine the remuneration in the prescribed manner. This split is stated in section 148(3). Reversing the roles, or giving the power to the Central Government or the statutory auditor, is incorrect.
- AThe cost auditor is appointed by the members and the Board fixes the remuneration
- BThe cost auditor is appointed by the Board and the remuneration is determined by the members in the prescribed mannerCorrect
- CBoth appointment and remuneration are fixed by the Central Government
- DThe cost auditor is appointed by the statutory auditor with Board approval
Explanation
Section 148(3) says the audit shall be conducted by a cost accountant appointed by the Board on such remuneration as may be determined by the members in the prescribed manner. Option A reverses the roles of the Board and the members.
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