COST AUDITOR Service in Mumbai, Maharashtra

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Service PAN India Cost Audit and Cost Reduction project. Leading by Experienced Cost Accountants along with CA, Chartered Engg and Valuers.

Who does the audit?

Board of Directors, of qualifying companies, under Section 233-B of the Companies Act has to appoint a Cost Accountant to undertake the Audit and provide a report.

Every company must file notice of appointment of cost auditor with RoC through electronic mode in Form CRA-2 within 30 days of the board meeting in which appointment is made, or within 180 days from date of commencement of financial year.

FinTax is Associated with best Cost Accountants in Practice to service Cost Audit of our clients pan India.

COST AUDIT APPLICABILITY

Section 148 of the Companies Act, 2013 lays out the provisions and requirements concerning Cost Records and Cost Audit applicability.

Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 identifies the companies who are required to keep Cost Records, undergo a Cost Audit, and submit Cost Audit Report, in two separate sections defined by

1. Table A , which covers regulated sectors dealing with specified goods/services and
   1. Overall annual total turnover from all products/services is INR 50 Crore or more.
   2. Aggregate turnover from the individual product/service is INR 25 Crore or more.

2. Table B which covers non regulated sectors dealing with specified goods/services and
   1. Overall annual total turnover from all products/services is INR 100 Crore or more.
   2. Aggregate turnover from the individual product/service is INR 35 Crore or more.

However, companies covered by above rules are exempted from conducting a cost record audit if any of the following situations arise:

1. The company’s export revenue in foreign exchange exceeds 75% of total revenue
2. Company operates from a Special Economic Zone (SEZ)
3. Company is engaged in production of electricity through Captive Generating Plant

Who does the audit?

Board of Directors, of qualifying companies, under Section 233-B of the Companies Act has to appoint a Cost Accountant to undertake the Audit and provide a report.

Every company must file notice of appointment of cost auditor with RoC through electronic mode in Form CRA-2 within 30 days of the board meeting in which appointment is made, or within 180 days from date of commencement of financial year.

What is Cost audit report?

The cost audit report is a certificate containing five paragraphs on fifteen specific points such as

1. Cost accounting system and cost accounting records
2. Inventory valuation
3. Budgetary control system
4. Related party transactions
5. Payments default to the Governments / Banks
6. Actual exports, Export benefits, and incentives on their profitability
7. Internal audit
8. Suggestions in respect to cost control and cost reduction
9. Independent audit opinion regarding the cost accounting records

After the audit is duly complete, report will be submitted in CRA-3 form by the auditor to the company. The company must then furnish the cost audit report, with full details and explanations to ROC electronically through Form CRA-4 along with digital signature of the Cost Auditor.

What is the deadline for filing Cost Audit XBRL report?

The Cost Audit Report in form CRA-3 must be submitted by the Cost Auditor to the Company within 180 days of closure of financial year. The company must file form The CRA-4 to MCA within 30 days from thereon.

COST AUDIT PROVISIONS UNDER COMPANIES ACT

• Section 148 (1) empowers the Central Government to direct the companies specified in the production of goods or provisions of service to include particulars relating to utilization of material or labour or other items of cost in the books of accounts of the company;
• List of specified companies, which needs to maintain the cost records, is provided under Table A and Table B of rule 3 of the Companies (Cost Records and Audit) Rules, 2014;
• Section 148 (2) empowers the Central Government to direct, based on the net worth or turnover of the company, audit of cost records of the specified class of companies;
• Rule 4 of the Companies (Cost Records and Audit) Rules, 2014 contains the provisions relating to the companies which are liable to get their cost records audited;
• Cost audit shall be conducted by the cost accountant who is appointed by the Board;
• In case of any default on the part of the company, it shall be punishable with the fine of an amount not less than INR 25,000, however, such fine cannot be more than INR 5 Lakhs. Further, every officer, in default, of the company shall be punishable with imprisonment for a term up to 1 year or with the fine not less than INR 10,000, however, the same cannot be more than INR 1,00,000;
• In case the cost auditor is in default, he shall be punishable in the manner as provided under section 147 (2) to section 147 (4).