Compulsory cost audit-good news for CMA's

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thanks for the info.

 

Companies (Cost Accounting Records) Rules, 2011

 

 

In respect of Companies engaged in production, procession, manufacturing or mining activity, and falls any one of the following category:

 

1. Net Worth of Rs. 5 Crores or more; or
2. Turnover exceeding Rs. 20 Crores ;or
3. Listed on any Stock Exchange

 

are required to maintain Cost Records on regularly basis in such a manner so that is could be possible to calculate per unit cost of production.

 

It shall be the duty of MD/ Every Director and other officers of the Company to take all reasonable steps to secure Compliance by the Company with the provisions of these rules as he is liable to maintain accounts u/s 209.

 

Every Company to which these rules apply shall submit a Compliance Report in respect of each financial year commencing from 1^st April, 2011 duly certified by the Cost Auditor to Central Government in prescribed form A within 180 days from the end of Financial Year along with other annexures. The annexures must be certified by the Cost Auditor.

 

Companies (Cost Audit Report) Rules, 2011

 

 

These rules shall apply to every company in respect of which an audit of the cost records has been ordered by the Central Government under sub-section (1) of section 233B of the Act.

Every company as specified in sub-rule (1) shall, within ninety days of the commencement of every financial year, file an application with the Central Government seeking prior approval for appointment of the cost auditor, through electronic mode, in the prescribed form.

Every cost auditor appointed under sub-rule (2) shall, within thirty days of receipt of letter of appointment, inform his appointment to the Central Government through electronic mode, in the prescribed form, along with the requisite enclosures.

 

Cost Auditors are required to submit Cost Audit Report with in 180 days of the end of financial year and also submit performance appraisal report duly authenticated by the Cost Auditor to the Board or Audit Committee in prescribed manner.

 

All the annexures are required to be certified by the Cost Auditor. It should also be approved by the Board of Directors before submitting to the Central Government by the Cost Auditor. The Annexures shall also be signed by the Company Secretary and at least one Director on behalf of the Company. In absence of Company Secretary, it should be signed by atleast two Directors.

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Now 90% companies need to maintain cost records and compliance certificate needs to be issued by Cost accountant either in practice or working cost accountant., it will boost the cost and Management Accounting profession. also complaince certificate contains production qty.of company and which will be e-filed to MCA, so Govt will get the GDP of Industries correctly. and our national govt. data related to GDP will be authenticated and certified by cost accountants

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