Test 802 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 Area Pin Code 1. Which of the following is NOT a consequence of non-compliance with cost audit requirements? Financial penalties Cancellation of company registration Disqualification of directors Legal action by MCA None 2. Which industry-specific cost accounting standard is most relevant for the pharmaceutical industry? CAS-5 (Material Cost) CAS-9 (Packing Material Cost) CAS-11 (Administrative Overheads) CAS-6 (Employee Cost) None 3. What is the purpose of sector-specific cost audit rules? To simplify GST compliance To standardize financial reporting across industries To improve cost management practices within the sector To enhance corporate tax filings None 4. The Cost Audit Report is prepared in which format? CRA-2 CRA-3 CRA-4 CRA-1 None 5. The Cost Audit Report is addressed to: The Board of Directors Ministry of Corporate Affairs Shareholders Registrar of Companies None 6. Which rule prescribes the format of the Cost Audit Report? Rule 5 of the Companies (Audit and Auditors) Rules, 2014 Rule 6 of the Companies (Cost Records and Audit) Rules, 2014 Rule 3 of the Companies Act, 2013 Rule 4 of the Income Tax Act, 1961 None 7. The Cost Audit Report must contain details of: Financial accounts only Operational costs and compliance Both financial and cost records Only statutory audit findings None 8. The Cost Audit Report includes which of the following annexures? Cost Statement Profit Reconciliation Statement Related Party Transactions All of the above None 9. Which part of the Cost Audit Report contains observations and suggestions? Annexure 1 B Part A of CRA-3 Part B of CRA-3 Section on cost compliance None 10. The Cost Audit Report primarily focuses on: Financial statement audit Cost of goods sold and cost control mechanisms Internal control reviews Tax compliance None 11. Reconciliation of profit is shown in which annexure of the Cost Audit Report? Annexure I Annexure II Annexure III Annexure IV None 12. Which of the following is not part of the Cost Audit Report? Related Party Transactions Cost Accounting Policy GST Reconciliation Environmental Cost Analysis None 13. The Cost Accounting Policy includes: Methods of inventory valuation Depreciation policy Allocation of overheads All of the above None 14. Details of capacity utilization are included in which section of the Cost Audit Report? Observations and recommendations Annexure on quantitative details Profit reconciliation Management declaration None 15. Material cost variance analysis is part of which annexure? Annexure on cost of production Annexure on related party transactions Annexure on operating costs None 16. Cost Audit Report must certify compliance with which standards? Generally Accepted Accounting Principles Cost Accounting Standards (CAS) Income Tax Standards Financial Reporting Standards None 17. Disclosure of related party transactions must include: Names of the parties Nature and value of transactions Basis of pricing All of the above None 18. The section on 'Observations and Recommendations' in the Cost Audit Report focuses on: Tax savings Suggestions for cost reduction and efficiency improvement] Financial profit enhancement strategies Shareholder decisions None 19. Details of export sales are disclosed in: Part B of CRA-3 Quantitative details section Annexure on related party transactions Reconciliation statement None 20. The Profit Reconciliation Statement connects cost accounts with: Tax returns Financial accounts internal control reports Budgeted figures None 21. Variance analysis in reconciliation focuses on: Total revenue Fixed and variable costs Actual vs. budgeted profits Net tax liabilities None 22. The Cost Audit Report is submitted to: MCA Portal Shareholders Financial institutions Tax authorities None 23. Form CRA-4 is used to file the Cost Audit Report with: SEBI MCA Registrar of Companies Reserve Bank of India None 24. The due date for submission of the Cost Audit Report to the Central Government is: 15 days from the end of the financial year 30 days from the receipt of the report by the company 45 days from the receipt of the report by the company 90 days from the end of the financial year None 25. Failure to file the Cost Audit Report may result in penalties for: The company The cost auditor Both the company and the cost auditor Only the Board of Directors None 26. Which of the following is NOT a penalty for non-compliance with cost audit provisions? Monetary fine Cancellation of company registration Imprisonment for directors Regulatory inquiry by MCA None 27. Operating cost per unit is disclosed in: Cost Statement Profit Reconciliation Statement Observations and Recommendations Cost Accounting Policy None 28. Fixed and variable cost classification is found in: Related Party Transactions Cost Structure Analysis Profit Reconciliation Statement Capacity Utilization Analysis None 29. The report should include details of utilities such as: Energy consumption Water usage Both A and B Only water usage None 30. Cost auditor’s observations must include: Major cost deviations and reasons Taxable income details Projected revenue growth Share market analysis None 31. Which of the following is a primary focus of the "Observations and Recommendations" section of the Cost Audit Report? Financial investment strategies Opportunities for cost reduction and process improvement Capital market trends Revenue generation models None 32. What should a cost auditor include in the report if inefficiencies are observed in production? Management response summary Suggestions for improving efficiency Detailed cost breakdown Operational compliance certificates None 33. The cost auditor’s recommendations should be based on Tax compliance policies Cost Accounting Standards (CAS) International Financial Reporting Standards Company Act guidelines only None 34. Cost auditor's analysis of capacity utilization should focus on: Installed and actual capacity utilization levels Tax implications of capacity utilization Marketing efficiency Financial ratios None 35. The report should include variance analysis for which ? Raw materials and labor costs Marketing and selling costs Administrative costs All of the above None 36. The detailed breakup of cost components in the Cost Audit Report includes: Material cost, labor cost, and overheads Financial asset values Share capital details Tax deducted at source None 37. In the Cost Audit Report, compliance with Cost Accounting Standards (CAS) ensures: Tax savings for the company Uniformity in cost accounting practices Improved profitability Financial disclosure accuracy None 38. Which section of the report verifies the company's adherence to cost audit regulations? Observations section Compliance Report Profit Reconciliation Statement Quantitative Analysis None 39. If discrepancies are found in cost records, the cost auditor should: Report them in the Observations and Recommendations section Ignore minor discrepancies Notify only the Board of Directors Consult the statutory auditor for further action None 40. What action should the Board of Directors take after receiving the Cost Audit Report? File the report with MCA within 30 days Share it with shareholders immediately Submit it to the Registrar of Companies directly Discuss it only in the Annual General Meeting None 1 out of 4 Great job on taking the INCOC Test! 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