CMA Final · Cost and Management Audit · Cost Auditor
Which statement correctly describes the relationship between the cost audit under section 148 and the audit under section 143 of the Companies Act, 2013?
The cost audit is in addition to the statutory audit under section 143, as section 148(4) states. It does not replace it or become optional. The statutory auditor appointed under section 139 also cannot be appointed to conduct the audit of cost records.
- AThe cost audit replaces the section 143 audit for companies covered by cost audit orders
- BThe cost audit is conducted in addition to the audit under section 143Correct
- CThe cost audit is optional if the section 143 audit is completed
- DThe section 143 auditor must also act as cost auditor to avoid duplication
Explanation
Section 148(4) states that an audit conducted under this section shall be in addition to the audit conducted under section 143. It does not replace it, and the first proviso to section 148(3) bars the section 139 auditor from being appointed as cost auditor.
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