Saturday, July 16, 2016

Now Cos. must obtain written consent from Cost Auditor prior to his appointment

MCA has amended the Companies (cost records and audit) Rules, 2014. The major changes brought in the rule are as under:
1) Written Consent by Cost auditor: Now it’s mandatory for the companies to take prior written approval/Consent from proposed cost auditor before his appointment.
2) Declaration/Certificate: Cost auditor appointed as per the Companies Act, 2013 has to submit a declaration that:
a) He is eligible for appointment and is not disqualified form appointment under the act, rules and regulations
b) He satisfies the criteria provided in the section 141 of the companies act, 2013
c) The proposed appointment is within the limits laid down by authority


d) The list of the proceeding against the cost auditor pending with respect to professional matter of conduct, as disclosed in the certificate, is true and correct.
3) Removal of Cost Auditor: Cost Auditor appointed under the Companies Act, 2013 may be removed from o􀁹ice before expire of his term, through board resolution after giving a reasonable opportunity of being heard to him and recording the reason for such removal in writing.
4) Cost Audit report: Companies should enclose cost statements including other statement with the cost audit report, which shall be approved by the board of directors.
5) XBRL format: Now companies have to give full information and explanation on every reservation or qualification contained in cost audit report, in XBRL format. Earlier such reporting was in normal format.
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