Skip to content

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

Which statement correctly describes who may be appointed to conduct the audit of cost records under section 148(3) of the Companies Act, 2013?

The audit of cost records must be conducted by a cost accountant appointed by the Board. A person who has been appointed under section 139 as the company's auditor cannot also be appointed for the cost audit. Members only determine the remuneration.

  1. AThe company's auditor appointed under section 139, since that person knows the books best
  2. BA cost accountant appointed by the Board, but not a person appointed under section 139 as auditor of the companyCorrect
  3. CAny person nominated by the Central Government irrespective of qualification
  4. DA cost accountant appointed by the members in general meeting with no Board role

Explanation

Section 148(3) provides that the audit shall be conducted by a cost accountant appointed by the Board, and the proviso bars a person appointed under section 139 as the company's auditor from being appointed for cost audit. The members only determine the remuneration, so appointment by members alone is incorrect.

Did you get it right without looking?

One question tells you little. A timed set on Basics of Cost Audit shows your real accuracy, how long you take and where you lose marks.

Practise Basics of Cost AuditFree diagnostic mock

More Basics of Cost Audit questions