• COST AUDIT AND COST AUDIT RULES PART 2
CONTEMPORARY AUDITING
CONTEMPORARY AUDITING
• DR SHASHI AGAGRWAL
1.
EVERY COMPANY UNDER THESE
RULES INCLUDING ALL UNITS AND BRANCHES THEREOF SHALL IN RESPECT OF EACH ITS
FINANCIAL YEAR STARTING ON OR AFTER THE IST DAY OF APRIL,2014 MAINTAIN COST
RECORD IN FORM CRA-1
2.
HAS TO BE MAINTAINED ON REGULAR BASIS SO THAT TO
FACILITATE CALCULATION OF PER UNIT OF COST OF PRODUCTION OR COST OF
OPERATIONS,COST OF SALES AND MARGIN FOR EACH OF ITS PRODUCTS AND ACTIVITIES FOR
EVERY FINANCIAL YEAR ON MONTHLY OR QUARTERLY OR HALF YEARLY OR ANNUAL BASIS.
3.
SHALL BE MAINTAINED IN SUCH MANNER SO AS TO ENABLE THE
COMPANY TO EXERCISE AS FAR AS POSSIBLE CONTROL OVER THE VARIOUS OPERATIONS AND
COSTS TO ACHIEVE OPTIMUM UTILIZATION OF RESOURCES AND THESE RECORD SHALL
PROVIDE NECESSARY DATA WHICH IS REQUIRED TO BE FURNISHED UNDER THESE RULES
• APPOINTMENT OF COST
AUDITOR ( RULE 6)
• THE AUDIT UNDER SUBSECTION
( 2) OF SECTION 148 OF THE COMPANIES ACT 2013 SHALL BE CONDUCTED BY COST
ACCOUNTANT IN PRACTICE WHO SHALL BE APPOINTED BY THE BOARD ON SUCH REMUNERATION
AS MAY BE DETERMINED BY THE MEMBERS IN THE FOLLOWING MANNER :
1.
THE COMPANIES REQUIRED TO GET ITS COST RECORDS AUDITED
SHALL WITH IN 180 DAYS OF THE COMMENCEMENT OF THE EVERY FINANCIAL YEAR APPOINT
A COST AUDITOR
2.
BEFORE SUCH APPOINTMENT IS MADE WRITTEN CONSENT OF COST
AUDITOR TO SUCH APPOINTMENT AND CERTIFICATE FROM HIM OR SHALL BE OBTAINED.
3.
NOTICE OF HIS APPOINTMENT HAS TO BE FILED WITH IN A
PERIOD OF 30DAYS OF BOARD MEETING OR WITH IN 180 DAYS OF THE COMMENCEMENT OF
THE FINANCIAL YEAR WHICH EVER IS EARLIER TO THE CENTRAL GOVERNMENT. THROUGH
ELECTRONIC MODE FORM CRA-2 ALONG WITH THE SPECIFIED DATE
4.
APPOINTMENT OF COST AUDITOR ( RULE 6)
5.
EVERY COST AUDITOR APPOINTED AS SUCH SHALL CONTINUE AS SUCH CAPACITY TILL THE EXPIRY OF
180 DAYS FROM THE CLOSURE OF THE FINANCIAL YEAR OR TILL HE SUBMITS THE COST
AUDIT REPORT FOR THE FINANCIAL YEAR FOR WHICH HE HAS BEEN APPOINTED.
6.
THE COST AUDITOR APPOINTED SHALL BE SUBMIT CERTIFICATE
THAT :
1.
THE INDIVIDUAL OR THE FIRM AS CASE MAY BE IS ELIGIBLE
FOR APPOINTMENT AND IS NOT DISQUALIFIED FOR APPOINTMENT UNDER THE ACT COST
WORKS ACCOUNTANT ACT RULES 1959
2.
ANY INDIVIDUAL OR THE FIRM AS THE CASE MAY BE SATISFIES
THE CRITERIA PROVIDED IN SECTION 141 SO FAR AS THE CASE IS APPLICABLE
• THE PROPOSED AMENDMENT IS
WITH IN THE LIMIT LAID DOWN BY OR UNDER THE AUTHORITY OF THE ACT
• THE LIST OF PROCEEDING
AGAINST THE COST AUDITOR OR AUDIT FIRM OR ANY PARTNER OF THE AUDIT FIRM PENDING
WITH RESPECT TO PROFESSIONAL MATTERS OF CONDUCT AS DISCLOSED IN THE CERTIFICATE
IS TRUE AND CORRECT
• EVERY COST AUDITOR
APPOINTED SUCH AS SHALL CONTINUE IN SUCH CAPACITY TILL THE EXPIRY OF 180 DAYS
FROM THE CLOSURE OF THE FINANCIAL YEAR OR TILL HE SUBMITS THE COST AUDIT REPORT
FOR THE FINANCIAL YEAR FOR WHICH HE HAS BEEN APPOINTED
• COST AUDITOR APPOINTED
UNDER THESE RULES MAY BE REMOVED FROM HIS OFFICE BEFORE THE EXPIRY OF HIS TERM
THROUGH A BOARD RESOLUTION AFTER A GIVING REASONABLE OPPORTUNITY OF BEING HEARD
TO THE COST AUDITOR AND RECORDING THE REASONS FOR SUCH REMOVAL IN WRITING
• FORM CRA -2 TO BE FILED WITH
THE CG FOR INTIMATING APPOINTMENT OF ANOTHER COST AUDITOR SHALL DISCLOSE THE
REL EVENT BOARD RESOLUTION TO THE EFFECT
• ANY CASUAL VACANCY IN THE
OFFICE OF COST AUDITOR WHETHER DUE TO RESIGNATION,DEATH OR REMOVAL SHALL BE
FILED BY THE BOD WITH IN 30 DAYS OF OCCURRENCE OF SUCH VACANCY
• THE COMPANY SHALL INFORM
THE CENTRAL GOVERNMENT IN FORM CRA 2 WITH IN 30 DAYS OF SUCH APPOINTMENT OF
COST AUDITOR.
• THE COST STATEMENTS
INCLUDING OTHER STATEMENTS TO BE ANNEXED TO THE COST AUDIT REPORT SHALL BE
APPROVED BY THE BOD BEFORE THEY ARE SIGNED ON BEHALF OF THE BOARD BY ANY OF THE
DIRECTOR AUTHORISED BY THE BOARD FOR SUBMISSION TO THE COST AUDITOR TO REPORT
THERON.
• EVERY COST AUDITOR WHO
CONDUCTS AN AUDIT OF THE COST RECORDS OF A COMPANY SHALL SUBMIT THE COST AUDIT
REPORT ALONG WITH HIS OR HER OR ITS RESERVATION OR QUALIFICATION OR OBSERVATIONS
OR SUGGESTIONS IF ANY IN FORM CRA 3
• FORWARD DULY SIGNED REPORT
TO BOD WITH IN PERIOD OF 180 DAYS FROM THE CLOSURE OF THE FINANCIAL YEAR TO
WHICH IT RELATES
• WITH IN 30 DAYS FROM THE
RECEIPT OF A COPY OF THE COST AUDIT REPORT FURNISH THE CG WITH SUCH REPORT ALONG
WITH FULL INFORMATION AND EXPLANATION ON EVERY RESERVATION OR QUALIFICATION
CONTAINED THEREIN FORM CRA -4 IN XBRL FORMAT IN SPECIFIED MANNER ALONG WITH
SPECIFIED FEES.
• ELIGIBILITY FOR
APPOINTMENT
• FOLLOWING PERSONS ARE
ELIGIBLE TO BE APPOINTED AS COST AUDITOR UNDER SECTION 233-B
•
COST ACCOUNTANT WITH THE MEANING OF THE COST AND WORKS
ACCOUNTANT ACT 1959 OR
•
ANY SUCH CA WITH IN THE MEANING OF THE CHARTERED
ACCOUNTANT ACT 1949 AND A FELLOW OF THE INSTITUTE OF CHARTERED ACCOUNTANT OF
INDIA FOR A PERIOD OF 10 YEARS AND HAS PASSED PART 1 OF THE MGMT ACCOUNTANCY
EXAMINATION OF THE INSTITUTE CHARTERED ACCOUNTANTS OF INDIA OR
•
ANY OTHER PERSON AS MAY POSSESS THE PRESCRIBED
QUALIFICATION
• DISQUALIFICATION
1.
AN OFFICER OR EMPLOYEE OF THE COMPANY
2.
A PERSON WHO IS A PARTNER OR WHO IS IN THE EMPLOYMENT
OF THE COMPANY SHALL NOT BE COST AUDITOR
3.
A BODY CORPORATE CAN NOT BE COST AUDITOR
4.
ANY PERSON APPOINTED AS A FINANCIAL AUDITOR OF THE
COMPANY SHALL NOT BE APPOINTED AS ITS COST AUDITOR
• RIGHTS OF COST AUDITOR
1.
HE HAS THE SAME
RIGHT IN RELATION TO AN AUDIT CONDUCTED BY HIM UNDER SECTION 148 AS THE AUDITOR
OF THE COMPANY UNDER SECTION 143
2.
HE HAS RIGHT TO ACCESS AT ALL TIMES TO THE BOOKS OF
ACCOUNTS AND VOUCHERS OF THE COMPANY
3.
RIGHT TO GET ALL SUCH INFORMATION AND EXPLANATION FROM
THE OFFICERS OF THE COMPANY AS HE MAY THINKS NECESSARY FOR THE PERFORMANCE OF
HIS DUTIES AS AN AUDITOR
4.
HE HAS RIGHT TO GET ALL FACILITIES AND ASSISTANCE FROM
THE COMPANY TO PERFORM HIS DUTIES AS AN AUDITOR
5.
THE COMPANY AND EVERY OFFICER IN DEFAULT OF NOT
PROVIDING THE ACCOUNTS VOUCHERS INFORMATION,EXPLANATIONS TO THE AUDITOR SHALL
BE PUNISHABLE WITH FINE
6.
OBLIGATION TO MAKE AVAILABLE TO THE COST AUDITOR WITH
IN 90 DAYS OF THE CLOSE OF THE FINANCIAL YEARS SUCH COST ACCOUNTING
RECORDS,STATEMENTS AND PAPERS
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