Neha Redekar
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The Central Government may direct any class of companies engaged in production of such goods or providing such services as may be prescribed to include in the books of accounts particulars relating to utilization of material or labour or such other items of cost. Further the Central Government may a
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FAQ :
Companies engaged in the production of goods or providing services listed in Table A and B of Rule 3, with an overall turnover of Rs. 35 Crore or more in the preceding financial year, are required to maintain cost accounting records. Micro and small enterprises are excluded.
For regulated sectors like telecommunication and pharmaceuticals, the threshold is Rs. 50 crores for all products/services or Rs. 25 crores for individual ones. For non-regulated sectors, it's Rs. 100 crores for all products/services or Rs. 35 crores for individual ones.
A cost auditor can be a cost accountant in practice, a firm of cost accountants, or a limited liability partnership of cost accountants. The statutory auditor of the company cannot be appointed as the cost auditor.
The cost auditor is appointed by the board of directors within 180 days of the commencement of the financial year. If an audit committee exists, it recommends the appointment and remuneration. Shareholders must ratify the remuneration.
Companies face fines from Rs. 25,000 to Rs. 5 lakh, and officers in default face fines from Rs. 10,000 to Rs. 1 lakh. Cost auditors in default face fines from Rs. 25,000 to Rs. 5 lakh or four times their remuneration, with stricter penalties for wilful deception.
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