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CMA Final · Cost and Management Audit · Overview of Cost Accounting Standards and GACAP

Which statement best describes the Generally Accepted Cost Accounting Principles (GACAP) issued by the ICMAI?

GACAP is a framework of principles issued by the ICMAI that guides cost accounting practice and underpins the Cost Accounting Standards. It is not an Act of Parliament, does not replace the Cost Records and Audit Rules, and does not prescribe penalties for non-compliance.

  1. AA set of principles that provides a framework for cost accounting practice, from which Cost Accounting Standards are developedCorrect
  2. BA statute enacted by Parliament governing cost records
  3. CA set of rules that replaces the Companies (Cost Records and Audit) Rules, 2014
  4. DA list of penalties for non-compliance with cost audit

Explanation

GACAP is a body of principles, issued by the ICMAI, that guides cost accounting practice and supports the Cost Accounting Standards. It is not a statute and does not replace the statutory Cost Records and Audit Rules, nor does it prescribe penalties, which arise under the Companies Act.

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