Latest provisions of proposed Campanies Act doesn't specify qualifaiction of cost auditor and it state that qualification of cost auditor will be same as of statutory auditor.
Does that mean only CAs can do cost audit ?
Link of info : https://www.financialexpress.com/news/Cost-accountants-oppose-changes-in-companies-law/385916/
Why don't you read sec 233B. A CA can be cost auditor but a statutory auditor can't be Cost Auditor.
Refer to Sec 233B (1) of Conpanies Act, 1956
Provided that if the Central Government is of opinion that sufficient number of cost accountants within the meaning of the Cost and Works Accountants Act, 1959 are not available for conducting the audit of the cost accounts of companies generally, that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the said notification, such Chartered Accountant within the meaning of the Chartered Accountants Act, 1949, as possesses the prescribed qualifications, may also conduct the audit of the cost accounts of companies, and thereupon a Chartered Accountant possessing the prescribed qualifications may be appointed to audit the cost accounts of the company.
Such single notification hasn't been issued till the date. But proposed provisions may make it CAs Job.
233B. Audit of cost accounts in certain cases
1[233B. Audit of cost accounts in certain cases
(1) Where in the opinion of the Central Government it is necessary so to do in relation to any company required under clause (d) of sub-section (1) of section 209 to include in its books of account the particulars referred to therein, the Central Government may, by order direct that an audit of cost accounts of the company shall be conducted in such manner as may be specified in the order by an auditor 2[who shall be a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959)] :
Provided that if the Central Government is of opinion that sufficient number of cost accountants within the meaning of the Cost and Works Accountants Act, 1959 are not available for conducting the audit of the cost accounts of companies generally, that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the said notification, such Chartered Accountant within the meaning of the Chartered Accountants Act, 1949, as possesses the prescribed qualifications, may also conduct the audit of the cost accounts of companies, and thereupon a Chartered Accountant possessing the prescribed qualifications may be appointed to audit the cost accounts of the company.]
3[(2) The auditor under this section shall be appointed by the Board of directors of the company in accordance with the provisions of sub-section (1B)of section 224 and with the previous approval of the Central Government :
Provided that before the appointment of any auditor is made by the Board, a written certificate shall be obtained by the Board from the auditor proposed to be so appointed to the effect that the appointment, if made, will be in accordance with the provisions of sub-section (1B) of section 224.]
(3) An audit conducted by an auditor under this section shall be in addition to an audit conducted by an auditor appointed under section 224.
(4) An auditor shall have the same powers and duties in relation to an audit conducted by him under this section as an auditor of a company has under subsection (1) of section 227 and such auditor shall make his report to the 4[Central Government] in such form and within such time as may be prescribed and shall also at the same time forward a copy of the report to the company.]
5[(5)(a) A person referred to in sub-section (3) or sub-section (4) of section 226 shall not be appointed or re-appointed for conducting the audit of the cost accounts of a company.
(b) A person appointed, under section 224, as an auditor of a company, shall not be appointed or re-appointed for conducting the audit of the cost accounts of that company.(6) Upon receipt of an order under sub-section (1), it shall be the duty of the company to give all facilities and assistance to the person appointed for conducting the audit of the cost accounts of the company.
(c) If a person, appointed for conducting the audit of cost accounts of a company, becomes subject, after his appointment, to any of the disqualifications specified in clause (a) or clause (b) of this sub-section, he shall on and from the date on which he becomes so subject, cease to conduct the audit of the cost accounts of the company.
(7) The company shall, within thirty days from the date of receipt of a copy of the report referred to in sub-section (4), furnish the Central Government with full information and explanations on every reservation or qualification contained in such report.
(8) If, after considering the report referred to in sub-section (4) and the information and explanations furnished by the company under sub-section (7), the Central Government is of opinion that any further information or explanation is necessary that Government may call for such further information and explanation and thereupon the company shall furnish the same within such time as may be specified by that Government.
(9) On receipt of the report referred to in sub-section (4) and the informations and explanations furnished by the company under sub-section (7) and sub-section (8), the Central Government may take such action on the report, in accordance with the provisions of this Act or any other law for the time being in force, as it may consider necessary.
(10) The Central Government may direct the company whose cost accounts have been audited under this section to circulate to its members, along with the notice of the annual general meeting to be held for the first time after the submission of such report, the whole or such portion of the said report as it may specify in this behalf.
(11) If default is made in complying with the provisions of this section, the company shall be liable to be punished with fine which may extend to five thousand rupees, and every officer of the company who is in default, shall be liable to be punished with imprisonment for a term which may extend to three years, or with fine which may extend to 6[fifty thousand rupees], or with both.]
1. Inserted by Act 31 of 1965, sec. 23 (w.e.f. 15th. October, 1965).
2. Substituted by Act 41 of 1974, sec. 25 for certain words (w.e.f. 1st. February, 1975).
3. Sub-section (2) subs. by Act 41 of 1974, sec. 25 (w.e.f. 1-2-1975) and again subs. by Act 31 of 1988, sec. 35 (w.e.f. 15-6-1988).
4. Substituted by Act 41 of 1974, sec. 25, for "Company Law Board" (w.e.f. 1st. February, 1975).
5. Inserted by Act 41 of 1974, sec. 25 (w.e.f. 1st. February, 1975).
6. Subs
Let the CAs perform financial audit properly earnestly and with ethics...then they can think of other audits.
As for the new provision of the company law:please learn to read the Bill than being emotional:
Section 131(
5) 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:
Provided that the report on the audit of cost records shall be submitted by the Cost
Accountant in practice to the Board of Directors of the company.
Let the CAs perform financial audit properly ,earnestly and with ethics...then they can think of other audits.
As for the new provision of the company law:please learn to read the Bill than being emotional:
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:
Provided that the report on the audit of cost records shall be submitted by the Cost
Accountant in practice to the Board of Directors of the company.
Section 131(
5) The qualifications, disqualifications, rights, duties and obligations applicable to
that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the said notification, such Chartered Accountant within the meaning of the Chartered Accountants Act, 1949, as possesses the prescribed qualifications, may also conduct the audit of the .....
Provided that if the Central Government is of opinion that sufficient number of cost accountants within the meaning of the Cost and Works Accountants Act, 1959 are not available for conducting the audit of the cost accounts of companies generally
A chartered Accountant who is also a cost accountant but in practice of chartered accountancy can be permitted to conduct cost audit holding certificate of practice of CA institute.....
Myquestion is :
Does the new comapies act state that only CAs can perform cost audit ?
I am not sue but i read it on the link i mentioned in my initial quote.
That is an apprehension expressed by the section of cost accountants.....
surely that is not the intention of the law-makers...as of now i feel India should now ban all type of audits which instead of preventing frauds perpetrate frauds?
If corporate self-governance is in place no need for audits.
Who will ensure corporate gavernance of a comapny?
We need Auditors and CS.
Can we on the basis of one fraud(sytam) conclude that audit is of no use ?
1
Audit performed as a ritual is of no use (signing the report), insteed if the appointed CA's do some ground work on Audit assignment the benefit will be felt for sure. And as far as the idea of allowing the corporates to govern themselves is like correcting your own marks sheet, so that u can put as much as marks you want!!!
No ca can not do cost audit.ICWA is much better than CA from all prospects and angles.CA is worst than bcom.
CAclubindia
