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CMA Final · Cost and Management Audit · Preparation and Filing of Cost Audit Report

Which statement about the relationship between cost audit under section 148 and the audit under section 143 is correct as per the Companies Act, 2013?

The cost audit is in addition to, and not a substitute for, the audit under section 143, as section 148(4) states. Further, the company's section 139 statutory auditor cannot be appointed to conduct the cost audit of the same company.

  1. ACost audit is in addition to the audit conducted under section 143Correct
  2. BCost audit replaces the section 143 audit for companies covered by the order
  3. CCost audit may be done by the section 139 auditor if the Board approves
  4. DCost audit is conducted only if the section 143 auditor has qualified the report

Explanation

Section 148(4) says an audit under this section is in addition to the audit under section 143. The first proviso to section 148(3) bars a person appointed under section 139 as auditor from being appointed for the cost audit, so options on replacement or Board approval are wrong.

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