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CMA Final · Cost and Management Audit · Basics of Cost Audit

Which statement about who may conduct a cost audit under section 148 of the Companies Act, 2013 is correct?

A cost accountant appointed by the Board conducts the cost audit. Section 148(3) bars any person appointed as the company's statutory auditor under section 139 from being appointed to audit cost records, and the members determine the remuneration in the prescribed manner.

  1. AThe company's statutory auditor appointed under section 139 may also be appointed for the cost audit, if the Board approves
  2. BA cost accountant appointed by the Board conducts it, and a person appointed as auditor under section 139 cannot be appointed for itCorrect
  3. CThe cost audit must be conducted by a chartered accountant appointed by the members
  4. DThe Central Government appoints the cost auditor and fixes the remuneration

Explanation

Section 148(3) says the audit is conducted by a cost accountant appointed by the Board, with remuneration determined by the members in the prescribed manner. The first proviso bars anyone appointed under section 139 as the company's auditor from the cost audit. The option allowing the statutory auditor to do both contradicts this proviso.

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