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Acceptance of professional assignment by a cost auditor

Pushpkant Mishra (Deputy Company Secretary) (59 Points)

27 October 2016

Can a Cost Auditor appointed u/s 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules 2014 for conducting the Cost Audit of the Company, accept any other professional assignment in the same company.

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2 Replies

CS Arjun Rajagopal (B.com, ACS) (1056 Points)
Replied 30 October 2016

Sir,

By combined reading of Section 148(5) and Section 144 of the Companies Act, 2013, my view is that cost auditor can render only such services as are approved by the Board of Directors or the audit committe, as the case may be but shall not include any of the following services (whether such services are rendered directly or indirectly to the company or its holding company or subsidiary company,
namely:—
(a) accounting and book keeping services;
(b) internal audit;
(c) design and implementation of any financial information system;
(d) actuarial services;
(e) investment advisory services;
(f) investment banking services;
(g) rendering of outsourced financial services;
(h) management services; and
(i) any other kind of services as may be prescribed:

Section 148(5) is reproduced herewith for your reference

As per Section 148(5) of the Companies Act, 2013, The qualifications, disqualifications, rights, duties and obligations applicable to auditors under this Chapter shall, so far as may be applicable, apply to a cost auditor appointed under this section and it shall be the duty of the company to give all assistance and facilities to the cost auditor appointed under this section for auditing the cost records of the company.