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2026 Statistics
Key Facts: CMA Final Paper 17 Exam
100
Marks in the Paper
ICMAI Syllabus 2022
3 hours
Exam Duration
ICMAI Syllabus 2022
50%
Section A Cost Audit Weight
ICMAI Syllabus 2022
4 forms
CRA-1 to CRA-4
Cost Records and Audit Rules 2014
Section 148
Cost Audit Provision
Companies Act 2013
40% / 50%
Pass: Paper / Group Aggregate
ICMAI Examination Rules
CMA Final Paper 17 (Cost and Management Audit) under ICMAI Syllabus 2022 is a 100-mark, 3-hour Group IV paper. It is divided into Section A: Cost Audit (50%), Section B: Management Audit (20%), Section C: Internal Control, Internal Audit, Operational Audit and Other Related Issues (20%), and Section D: Forensic Audit and Anti-Money Laundering (10%). Cost audit topics centre on the Companies (Cost Records and Audit) Rules 2014, CRA-1 to CRA-4 forms, cost auditor appointment under Section 148, and Cost Accounting Standards. To pass, candidates need 40% in the paper and 50% aggregate in the group.
Sample CMA Final Paper 17 Practice Questions
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1Under the Companies (Cost Records and Audit) Rules, 2014, which form is used by a cost auditor to submit the cost audit report to the Board of Directors of the company?
A.Form CRA-4
B.Form CRA-1
C.Form CRA-2
D.Form CRA-3
Explanation: Form CRA-3 is the prescribed format in which the cost auditor submits the cost audit report to the Board of Directors. CRA-1 prescribes the particulars of cost records, CRA-2 is the intimation of appointment of cost auditor to the Central Government, and CRA-4 is used by the company to file the cost audit report in XBRL with the Central Government.
2Within how many days of receipt of the cost audit report from the cost auditor must a company furnish the report (Form CRA-4) to the Central Government under the Companies (Cost Records and Audit) Rules, 2014?
A.180 days
B.15 days
C.30 days
D.60 days
Explanation: Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014 requires a company to furnish the cost audit report along with full information and explanation on every qualification or reservation to the Central Government in Form CRA-4 within 30 days from the date of receipt of a copy of the cost audit report.
3The cost auditor of a company under Section 148 of the Companies Act, 2013 is appointed by:
A.The Board of Directors
B.The Central Government
C.The Comptroller and Auditor General of India
D.The shareholders at the AGM
Explanation: Under Section 148(3) of the Companies Act, 2013 read with Rule 6 of the Cost Records and Audit Rules, the cost auditor is appointed by the Board of Directors. The remuneration so fixed by the Board is subsequently ratified by the shareholders, but the appointment itself is a Board function.
4A cost auditor under Section 148 of the Companies Act, 2013 must be:
A.A Chartered Accountant in practice
B.A Cost Accountant in practice
C.A Company Secretary in practice
D.Any person with an MBA in Finance
Explanation: Section 148(3) provides that the cost audit shall be conducted by a Cost Accountant who is a member of the Institute of Cost Accountants of India and holds a certificate of practice. A statutory (financial) auditor under Section 139 cannot be appointed as the cost auditor of the same company.
5Under the Companies (Cost Records and Audit) Rules, 2014, the particulars relating to the items of costs to be included in the cost records are prescribed in:
A.Form CRA-2
B.Form CRA-3
C.Schedule III of the Companies Act
D.Form CRA-1
Explanation: Form CRA-1 specifies the particulars relating to the items of cost to be maintained in the cost records, organised under headings such as material costs, employee costs, utilities, depreciation, repairs and maintenance, and overheads. Maintaining records in conformity with CRA-1 is mandatory for companies covered under Rule 3.
6Cost audit primarily aims to verify the cost accounting records and ensure adherence to the cost accounting plan. This concept is best described as:
A.A review of the bank reconciliation statement
B.A verification of the financial profit only
C.A propriety and accuracy audit of cost records
D.A statutory tax computation exercise
Explanation: Cost audit is the verification of the correctness of cost accounts and a check on the adherence to the cost accounting plan. It examines both the arithmetical accuracy of cost records and the propriety (wisdom and economy) of expenditure, ensuring conformity with cost accounting principles, plans and objectives.
7Companies engaged in the production of goods or provision of services in the regulated sectors and certain non-regulated sectors are required to maintain cost records if their overall turnover from all products and services during the immediately preceding financial year is:
A.Rs. 35 crore or more
B.Rs. 50 crore or more
C.Rs. 100 crore or more
D.Rs. 25 crore or more
Explanation: Under Rule 3 of the Companies (Cost Records and Audit) Rules, 2014, companies engaged in the specified regulated and non-regulated sectors having an overall turnover of Rs. 35 crore or more in the immediately preceding financial year are required to maintain cost records in Form CRA-1.
8For companies in the NON-REGULATED sectors, cost audit is applicable if the overall annual turnover is Rs. 100 crore or more AND the aggregate turnover of the individual product(s) or service(s) for which cost records are required is:
A.Rs. 25 crore or more
B.Rs. 35 crore or more
C.Rs. 50 crore or more
D.Rs. 75 crore or more
Explanation: Under Rule 4 of the Cost Records and Audit Rules, for non-regulated sectors cost audit applies where the overall turnover is Rs. 100 crore or more and the aggregate turnover of the individual product(s) or service(s) for which cost records are required is Rs. 35 crore or more. Both conditions must be satisfied.
9For companies in the REGULATED sectors, cost audit is applicable if the overall annual turnover is Rs. 50 crore or more and the aggregate turnover of the individual product(s) or service(s) for which cost records are required is:
A.Rs. 35 crore or more
B.Rs. 50 crore or more
C.Rs. 10 crore or more
D.Rs. 25 crore or more
Explanation: Under Rule 4 of the Cost Records and Audit Rules, for regulated sectors cost audit applies where the overall turnover is Rs. 50 crore or more and the aggregate turnover of the individual product(s) or service(s) for which cost records are required is Rs. 25 crore or more.
10Which of the following is classified as a REGULATED sector under the Companies (Cost Records and Audit) Rules, 2014?
A.Sugar production
B.Garments and textiles
C.Telecommunication services
D.Steel manufacturing
Explanation: Telecommunication services regulated under the Telecom Regulatory Authority of India Act fall within the regulated sectors in Table A of Rule 3. Other regulated sectors include electricity, petroleum, drugs and pharmaceuticals, fertilisers and sugar. Textiles and steel are listed under the non-regulated sectors of Table B.
About the CMA Final Paper 17 Practice Questions
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