Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Cost and Management Audit Total Number of Question: 40 Time: 41 Minutes All the best... Kind Regards CMA Madhuri Kashyap Profile: Click Here! Name Phone No Email Area Pin Code 1. Which of the following statements about cost audit is true? It is voluntary for all companies It focuses on cost reduction strategies only It ensures compliance with cost accounting standards It replaces financial audit None 2. Which of the following is NOT a responsibility of a cost auditor? Examining cost records Advising on pricing policies Investigating fraudulent financial transactions Verifying the accuracy of cost accounting records None 3. Cost audit is mandatory for a company if its net worth exceeds: ₹10 crore ₹25 crore ₹50 crore ₹100 crore None 4. Which document prescribes the cost accounting records to be maintained by a company? Companies (Audit and Auditors) Rules, 2014 Companies (Cost Records and Audit) Rules, 2014 Companies (Financial Statements) Rules, 2017 SEBI (LODR) Regulations, 2015 None 5. The primary objective of cost audit is to: Detect financial frauds Improve cost efficiency Ensure tax compliance Validate financial statements None 6. Cost audit helps in: Evaluating financial risk exposure Strengthening internal cost control systems Avoiding external audits Reducing the statutory compliance burden None 7. Which of the following is NOT a benefit of cost audit? Identification of loss-making products Reduction in statutory audit scope Improved resource allocation Cost control and efficiency improvement None 8. Which of the following companies is NOT subject to cost audit? A company engaged in petroleum refining A company engaged in banking operations A company engaged in cement manufacturing A company engaged in telecommunications None 9. A cost auditor’s independence is governed by which section of the Companies Act, 2013? Section 133 Section 141 Section 148 Section 230 None 10. Which regulatory body mandates cost audit compliance? ICAI SEBI MCA NCLT None 11. The cost auditor must submit the audit report within how many days of the end of the financial year? 30 days 60 days 90 days 120 days None 12. Which of the following forms is used for filing cost audit reports with MCA? CRA-2 CRA-3 CRA-4 MGT-7 None 13. What is the penalty for failure to comply with cost audit provisions? ₹50,000 fine ₹1 lakh fine ₹5 lakh fine ₹10 lakh fine None 14. Which of the following reports is NOT included in cost audit? Cost Statements Cost Audit Report Financial Statements Annexures to Cost Audit Report None 15. Cost audit is primarily focused on: Evaluating financial performance Ensuring operational efficiency Assessing statutory compliance Analyzing business risks None 16. Which of the following costs is NOT covered under a cost audit? Material cost Labour cost Selling and distribution cost Personal expenses of directors None 17. Cost audit is applicable to a company engaged in production if its turnover exceeds: ₹25 crore ₹50 crore ₹100 crore ₹500 crore None 18. Which of the following is NOT a feature of cost audit? Mandatory for specified industries Focuses on cost efficiency Identifies pricing strategies Replaces statutory financial audit None 19. A cost auditor is appointed by: Board of Directors Shareholders Ministry of Corporate Affairs CEO None 20. Which industry is NOT covered under cost audit regulations? Pharmaceutical industry Textile industry IT software development Telecommunication None 21. Which cost audit technique is used to analyze variances between budgeted and actual costs? Standard costing Ratio analysis Cash flow analysis Variance analysis None 22. Which of the following is a tool used in cost audit? Trial balance Cost sheet Tax audit report Profit & Loss statement None 23. Which of the following is a primary objective of cost audit? Verifying profit calculations Detecting fraud Controlling costs and improving efficiency Ensuring income tax compliance None 24. Which method is commonly used to allocate overhead costs in cost audit? Direct allocation Absorption costing FIFO method Net present value None 25. Which of the following techniques is used for analyzing cost behavior? Break-even analysis Bank reconciliation External audit Deferred tax computation None 26. The cost auditor must submit the audit report to the Board of Directors within: 30 days 60 days 90 days 120 days None 27. Which form is used for the appointment of a cost auditor? CRA-1 CRA-2 CRA-3 CRA-4 None 28. Which annexure in the cost audit report deals with reconciliation of cost and financial accounts? Annexure 1 Annexure 2 Annexure 3 Annexure 4 None 29. Who is responsible for the accuracy of cost records in a company Cost Auditor CFO Board of Directors Statutory Auditor None 30. Under which rule does the submission of a cost audit report to MCA fall? Rule 3 of Companies (Audit and Auditors) Rules Rule 4 of Companies (Cost Records and Audit) Rules Rule 6 of Companies (Accounts) Rules Rule 9 of SEBI (LODR) Regulations None 31. Which ethical principle is crucial for a cost auditor? Confidentiality Flexibility in reporting Business promotion Aggressive pricing strategies None 32. Which section of the Companies Act, 2013, governs cost audit? Section 133 Section 141 Section 148 Section 197 None 33. The penalty for a company’s failure to comply with cost audit provisions can go up to: ₹1 lakh ₹2 lakh ₹5 lakh ₹10 lakh None 34. A cost auditor cannot provide which of the following services to the auditee company? Management consulting Internal audit Cost efficiency advice Legal representation None 35. A company that fails to appoint a cost auditor within the prescribed time frame is liable for: Warning notice Penalty under Companies Act, 2013 SEBI investigation Exemption from cost audit for that year None 36. Which emerging technology is widely used in cost auditing? Blockchain Social media marketing Virtual reality Influencer marketing None 37. Which of the following is an advanced technique in cost audit? Historical cost analysis Predictive cost analytics Random sampling Manual bookkeeping None 38. The use of Artificial Intelligence (AI) in cost audit helps in: Eliminating human involvement Automating data analysis Reducing compliance requirements Avoiding cost audits None 39. Which of the following software is commonly used in cost audit processes? Tally ERP Photoshop Canva QuickBooks None 40. Data analytics in cost auditing helps in: Fraud detection Increasing advertising revenue Reducing financial statement disclosures Ignoring historical cost trends None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
