Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Cost and Management Audit Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. Which of the following is a primary objective of cost audit? Detection of frauds and errors Verification of financial accounts Cost control and cost reduction None of the above None 2. Who appoints a cost auditor in a company? Board of Directors Shareholders Audit Committee Registrar of Companies None 3. Under which section of the Companies Act, 2013, are rules for cost records and cost audit issued? Section 139 Section 148 Section 134 Section 147 None 4. Cost records must be maintained by companies operating in which sector? Banking Education Manufacturing Real Estate None 5. Which of the following is a part of the cost audit process? Appointment of statutory auditors Preparing a cost audit report Filing tax returns Preparing annual financial statements None 6. Cost audit reports are submitted to the company in which prescribed form? CRA-1 CRA-2 CRA-3 CRA-4 None 7. What is the due date for filing the cost audit report with the Central Government? 30 days from the end of the financial year 90 days from the end of the financial year 180 days from the end of the financial year 30 days from receiving the report from the cost auditor None 8. The Cost Auditor is required to submit Form CRA-4 to the Central Government through which portal? GST Portal Income Tax Portal MCA Portal SEBI Portal None 9. What is the main objective of management audit? Verification of assets Evaluation of managerial efficiency Detection of fraud Tax compliance None 10. Management audit primarily focuses on which of the following? Operational efficiency Financial accounting records Legal compliance Statutory regulations None 11. Under which section of the Companies Act, 2013, is the cost audit regulated? Section 139 Section 148 Section 134 Section 135 None 12. Which type of companies are required to maintain cost records as per the Companies Act, 2013? All listed companies Specified companies engaged in manufacturing or production of goods/services All unlisted companies Non-profit companies None 13. The Companies (Cost Records and Audit) Rules, 2014, are issued under which Act? Income Tax Act Companies Act, 1956 Companies Act, 2013 GST Act None 14. Who has the authority to appoint a cost auditor? Shareholders Board of Directors Ministry of Corporate Affairs Registrar of Companies None 15. Which of the following is NOT a qualification for a cost auditor? Member of ICMAI Experience in cost management practices Member of ICAI Independent of the company’s management None 16. What is the tenure of a cost auditor’s appointment? 1 year 3 years 5 years Until revoked by the shareholders None 17. What is the primary objective of maintaining cost records? Filing of GST returns Analysis of profitability Statutory compliance and cost control Financial statement preparation None 18. Cost records must be maintained for a period of at least how many years? 3 years 5 years 7 years 10 years None 19. Which Rule specifies the maintenance of cost records in prescribed industries? Rule 2 of the Companies (Cost Records and Audit) Rules, 2014 Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 Rule 4 of the Companies (Audit and Auditors) Rules, 2014 Rule 5 of the Companies (Management and Administration) Rules, 2014 None 20. Which industries are mandatorily required to conduct cost audits under the rules? Pharmaceuticals and textiles Healthcare and education Manufacturing and regulated sectors like power and telecom Retail and agriculture None 21. Cost Audit Reports are submitted to the Board of Directors in which form? CRA-1 CRA-3 CRA-2 CRA-4 None 22. Form CRA-4 is used to submit cost audit reports to the: Audit Committee Ministry of Corporate Affairs (MCA) Registrar of Companies (ROC) Securities and Exchange Board of India (SEBI) None 23. What is the penalty for non-compliance with cost audit provisions under the Companies Act, 2013? Fine of up to ₹1 lakh Fine of up to ₹10 lakh Imprisonment up to 1 year Both fine and imprisonment None 24. Which body is primarily responsible for issuing cost audit standards in India? ICAI ICMAI SEBI MCA None 25. Which statutory authority governs the enforcement of cost audit provisions? Reserve Bank of India (RBI) Ministry of Finance Ministry of Corporate Affairs (MCA) Securities and Exchange Board of India (SEBI) None 26. What is the deadline for the cost auditor to submit the audit report to the company? 90 days from the end of the financial year 180 days from the end of the financial year 30 days from the end of the financial year 150 days from the end of the financial year None 27. The cost audit report must be filed with the MCA within how many days of receiving it from the cost auditor? 15 days 30 days 45 days 60 days None 28. Cost audit is mandatory for companies meeting which threshold? Turnover of ₹25 crore or more Turnover of ₹35 crore or more Turnover of ₹50 crore or more Turnover of ₹50 crore or more None 29. Which companies are exempt from cost audit despite falling under the specified industries? Companies operating in SEZs Companies engaged in 100% exports Small-scale companies All of the above None 30. If a company ceases operations during the financial year, are cost records still required? Yes, cost records are mandatory for the entire year. No, cost records are not required for the ceased period.tomatically Only required until the cessation date. Cost audit is waived off automatically None 31. The cost auditor’s primary role is to: Evaluate statutory compliance of taxes. Ensure the cost records are accurate and align with cost audit standards. File annual returns on behalf of the company Investigate fraud in financial statements. None 32. Can the cost auditor be a relative of a director of the company? Yes, with proper disclosure. No, it violates independence criteria. Only if approved by shareholders. Yes, if not directly involved in decision-making None 33. In case of resignation, a cost auditor must inform: The Board of Directors The Ministry of Corporate Affairs The Audit Committee and MCA The shareholders directly None 34. Cost auditors must follow the cost audit standards issued by: Reserve Bank of India Ministry of Corporate Affairs Institute of Cost Accountants of India (ICMAI) Securities and Exchange Board of India None 35. Which of the following is NOT part of cost audit standards? Scope of audit Financial statement analysis Audit documentation Reporting framework None 36. Cost audit standards are mandatory for: All types of audits conducted by ICMAI members Only statutory cost audits Internal audits Compliance audits under GST None 37. The cost audit report must be signed by: Statutory auditor Any member of the Board of Directors The cost auditor and company secretary The cost auditor with their ICMAI membership number None 38. Disclosure of cost audit details is included in which company document? Financial Statements Annual Report Director’s Report Auditor’s Report None 39. Filing of CRA-4 is required to be done in: Physical format only Digital format through MCA portal Both physical and digital format Filing is not required None 40. What is the penalty for the cost auditor for contravening provisions of cost audit? Fine of up to ₹50,000 Fine of up to ₹1 lakh Fine and imprisonment for up to 3 years Only a warning letter from MCA None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. 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