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

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

The cost audit is in addition to the audit conducted under section 143. Section 148(4) states this. It does not replace the statutory audit, and the statutory auditor cannot be appointed to conduct it, so both audits proceed independently.

  1. AThe cost audit is in addition to the audit conducted under section 143Correct
  2. BThe cost audit replaces the audit under section 143 for companies covered by it
  3. CThe cost audit is a part of the section 143 audit and is done by the statutory auditor
  4. DThe cost audit is optional once the statutory audit is completed

Explanation

Section 148(4) says an audit conducted under this section shall be in addition to the audit under section 143. So it neither replaces nor forms part of the statutory audit. Section 148(3) also bars the statutory auditor from the cost audit, ruling out the third option.

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