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CMA Final · Cost and Management Audit · Cost Auditor

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

The cost auditor is treated like an auditor under the Chapter, so far as applicable, and the company must give all assistance and facilities. Section 148(5) says so. The cost audit is in addition to the section 143 audit, and cost auditing standards must be complied with.

  1. AThe qualifications, disqualifications, rights, duties and obligations of auditors under the Chapter apply to the cost auditor so far as applicable, and the company must give all assistance and facilitiesCorrect
  2. BThe cost audit replaces the audit under section 143 for companies directed to have it
  3. CThe cost auditor is exempt from the Chapter's provisions on auditors, since the audit is by Central Government direction
  4. DThe cost auditor need not comply with cost auditing standards unless the company's Board resolves to adopt them

Explanation

Section 148(5) applies the auditor provisions of the Chapter to the cost auditor so far as applicable and obliges the company to give all assistance and facilities. Section 148(4) says the cost audit is in addition to, not in place of, the section 143 audit. The second proviso to section 148(3) requires the cost auditor to comply with cost auditing standards, regardless of any Board resolution.

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