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Cost Audit

(Guest)

Whether in any way, reporting on matters under section 143(3) come within the scope of the Duties of a Cost Auditor as per section 143(14) read with section 148(5)???

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12 Replies

Sunil Sharma (CMA & CS) (584 Points)
Replied 04 May 2017

section 139 to 148 deals with Audit and auditor, In this case of relevant section Yes, case if an cost auditor find out any discrepancies in 143-3 he has the same duties of that of an Auditor

Sunil Sharma (CMA & CS) (584 Points)
Replied 04 May 2017

He have to mention the same in his report as an comment or remark which he or she submits to the directors and to which they have to provide a strong statement while filing it with MCA

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(Guest)

So the cost auditor also required to report on whether any director is disqualified from being appointed as a director under sub-section (2) of section 164??

Sunil Sharma (CMA & CS) (584 Points)
Replied 05 May 2017

if that being the case yes, but it should not be the case as while doing the financial audit this must have been taken care

(Guest)

the books of accounts for the purpose confines only to the cost records . right???

Sunil Sharma (CMA & CS) (584 Points)
Replied 05 May 2017

Not exactly but the cost auditor have the equal rights that of an financial auditor and can refer the financial records too in case he deemed too for the cost audit , However kindly check with section 143-12 which also apply to a cost accountant in case of any discrepancies and have the complete authority to report to the central Govt

(Guest)

If the cost auditor is required to report on matters(143-3) which are already reported by the financial auditor, then don't that become a duplication of effort??

Sunil Sharma (CMA & CS) (584 Points)
Replied 05 May 2017

Yes it will ,so only if you check my previous comment I have mentioned in your case it will be taken care by then itself and will not be prolonged till cost audit

(Guest)

doe s that mean the cost auditor is not required to report on matters which are already taken care of by the financial auditor??

Sunil Sharma (CMA & CS) (584 Points)
Replied 05 May 2017

James , See there are two parts in your question one regarding the Disqualification of director for which it should have been reported in the Financial Audit and in case it was not then it can be done during cost audit as well by qualifying the report.
coming to the second part is it not required..?? to report the fact missed by the financial auditor does not sound good and it's against the Compliance.
Henceforth in case where the chances are very less if something is missed out a Cost Auditor can report the same.
It's not an matter of who does what what matters is the compliance.