Quiz 6

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Subject: Cost Audit and Cost Records

Total Number of Question: 40

Time: 41 Minutes

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CMA Madhuri Kashyap

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Name

Phone No

Area Pin Code

What is the primary purpose of cost records?

To calculate sales price -

Control production

To ascertain and control costs

To determine tax liabilities

None

Who is responsible for appointing a cost auditor in a company?

Board of Directors

Shareholders

Central Government

CFO

None

What is the primary document guiding cost records and audit?

Income Tax Act

Companies (Cost Records and Audit) Rules, 2014

Companies Act, 1956

SEBI Regulations

None

Which entity issues the cost audit report to the company?

Tax authorities -

Cost Auditor

Internal Auditor

SEBI

None

What is the duration for which cost records must be preserved?

3 years

5 years

8 years

10 years

None

Who reviews and approves the cost audit report?

CFO

Board of Directors

CEO

Shareholders

None

Which of the following is NOT part of a cost audit?

Verifying sales invoices

Checking compliance with cost accounting standards

Evaluating cost control measures

Ensuring accurate recording of costs

None

Which cost is often the primary focus of a cost audit?

Direct materials

Production cost

Marketing expenses

Administrative expense

None

The cost auditor's appointment must be approved by the company's shareholders at the next:

Extraordinary General Meeting

Annual General Meeting

Board Meeting

Audit Committee Meeting

None

10.

The cost auditor submits the cost audit report to the company’s:

Chief Financial Officer

Board of Directors

Internal Auditor

HR Department

None

11.

Which audit report form is used for cost audits?

CRA-2

CRA-3

CRA-4

CRA-5

None

12.

Which authority mandates Cost Audit?

SEBI

Central Government

RBI

State Government

None

13.

Cost records are primarily required for which type of industries?

All industries

Banking

Specified industries

Service industries

None

14.

Cost records must comply with which standards?

IFRS

Cost Accounting Standards (CAS)

GAAP

Ind AS

None

15.

Which form is used for filing the cost audit report with the government?

CRA-2

CRA-3

CRA-4

CRA-5

None

16.

The primary purpose of cost audit is to:

Detect fraud

Monitor profits

Ensure compliance with cost accounting principles

Manage investments

None

17.

Which document does the cost auditor review to understand raw material costs?

Sales invoices

Material requisition slips

Tax returns

Cash flow statements

None

18.

Cost audit assists in determining:

Product profitability

Total revenue

Market share

Fixed assets

None

19.

In which year did cost audit become mandatory for certain industries in India?

1965

1973

2014

2018

None

20.

Which costs are usually excluded from the cost audit scope?

Direct material costs

Financial and investment costs

Production costs

Overheads

None

21.

Which of the following is not typically verified in a cost audit?

Cost ledger

Labor cost records

Financial ledger

Production cost records

None

22.

The responsibility to implement cost records lies with the:

Cost Auditor

Company Management

Shareholders

External Auditor

None

23.

Cost accounting standards in India are issued by:

SEBI -

ICMAI

ICAI

Ministry of Corporate Affairs

None

24.

Cost audit is primarily concerned with:

Verifying sales transactions

Checking shareholder dividends

Evaluating cost control mechanisms

Auditing tax returns

None

25.

Which of the following is a key benefit of conducting a cost audit?

Enhancing tax compliance

Improving cost control and efficiency

Increasing sales revenue

Reducing employee turnover

None

26.

Which form is used for intimation of the appointment of a cost auditor to the Central Government?

CRA-1

CRA-2

CRA-3

CRA-4

None

27.

The cost audit report should be submitted to the Board of Directors within how many days from the closure of the financial year?

30 days

60 days

180 days

120 days

None

28.

Which of the following industries is typically exempt from mandatory cost audit?

Cement

Pharmaceuticals

Information Technology

Steel

None

29.

The primary objective of maintaining cost records is to:

Comply with tax regulations

Determine product pricing

Monitor and control operational efficiency

Prepare financial statements

None

30.

Which document outlines the scope and methodology of a cost audit?

Audit Plan

Cost Audit Report

Engagement Letter

Cost Accounting Policy

None

31.

In cost accounting, 'CAS' stands for:

Cost Audit Standards

Cost Accounting Standards

Corporate Accounting Standards

Central Audit Standards

None

32.

Which of the following is not a component of cost records?

Material cost records

Labor cost records

Overhead cost records

Investment portfolio records

None

33.

The term 'cost audit' refers to:

Financial audit of cost statements

Systematic examination of cost records and verification of cost accounts

Internal audit of financial transactions

External audit of tax return

None

34.

Which section of the Companies Act, 2013 deals with the maintenance of cost records?

Section 128

Section 133

Section 148

Section 152

None

35.

The cost auditor's report is submitted in which form?

CRA-1

CRA-2

CRA-3

CRA-4

None

36.

Which body is responsible for issuing Cost Accounting Standards in India?

Institute of Chartered Accountants of India (ICAI)

Institute of Cost Accountants of India (ICAI)

Securities and Exchange Board of India (SEBI)

Ministry of Corporate Affairs (MCA)

None

37.

The primary focus of a cost audit is to:

Verify financial statements

Assess tax liabilities

Evaluate cost control and efficiency

Audit sales transactions

None

38.

Which of the following is a statutory requirement under the Companies Act, 2013?

Financial audit

Internal audit

Cost audit for specified companies

Management audit

None

39.

Cost records are required to be maintained by companies under which section of the Companies Act, 2013?

Section 128

Section 148

Section 139

Section 135

None

40.

Which rules govern the maintenance of cost records in India?

Companies (Cost Records and Audit) Rules, 2014

Companies (Audit and Auditors) Rules, 2014

Companies (Management and Administration) Rules, 2014

Companies (Accounts) Rules, 2014

None

1 out of 4

May the best brain win! Let the games begin! May knowledge be your guide, and may your answers be swift and precise.

Embrace the challenge, unleash your potential, and may the thrill of the competition ignite your passion for learning.

Good luck to you!

CMA Madhuri Kashayp

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