How cost auditor is appointed?

The cost auditor is to be appointed by the Board of Directors on the recommendation of the Audit Committee, where the company is required to have an Audit Committee.
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How are auditors appointed?

After incorporation of a company in the first annual general meeting, an Auditor must be appointed by the Board of Directors. The Auditor will typically hold term till the conclusion of 6th AGM or 5 years. The appointment of an Auditor can also be made for a period of 1 year, renewable at each annual general meeting.
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Who Cannot be appointed as cost auditor of a company?

A person cannot be appointed as a cost auditor of a company if he attracts any of the disqualifications listed in sub-sections (3) and (4) of section 226 of the companies act, 1956.
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Who can appoint Cost Auditor MCQS?

Rule 14 of Companies (Audit and Auditor) Rules, 2014– For purpose of section 148(3), in case of Companies which are required to constitute Audit Committees, the Board shall appoint a Individual who is a Cost accountant in practice or firm of cost Accountant in practice, as cost Auditor on recommendation of Audit ...
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Who is responsible for appointing the auditor?

Auditors must be appointed upon incorporated by the incorporators or subsequently by the directors of the company within stipulated timeframes. The first auditors of a company hold office until the first Annual General Meeting (AGM), and are re-appointed on an annual basis at every AGM.
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Cost Auditor - Appointment, Eligibility, Remuneration ,Rights



How do you appoint a company's first auditor?

Section 139(6) of the Companies Act, 2013 lays down that first auditor of a company, other than a Government company, shall be appointed by the Board of Directors within 30 days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of ...
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What is the period for appointing auditors?

In each financial year, there is a 'period for appointing auditors'. This is a 28 day period which starts to run on the date on which the audited accounts for the previous year were circulated to the members (as distinct from being signed off by the trustees).
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Who can be appointed as cost auditor under the prescribed act?

Only a Cost Accountant can be appointed as Cost Auditor for conducting cost audit. Cost Accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act.
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Who appoints the cost auditor after the approval of central government?

According to section 148(3) of the Companies Act, Cost Audit shall be conducted by Cost Accountant in practice. Appointment of Cost Auditor shall be done by Board resolution along with previous approval of Central Government.
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Who is responsible for appointment of auditor Mcq?

The board of directors shall appoint first auditor of a company5.
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How can I become a cost auditor in India?

The person to be appointed as auditor must hold a certificate of practice from the Institute of Cost and Works Accountants of India. Consent of the cost auditor should be obtained before making an appointment.
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Who is applicable for cost audit?

The Companies (Cost Records and Audit) Rules, 2014 are applicable to every company registered under the Companies Act which are engaged in production of goods or providing of services listed in Table-A or Table-B of Rule 3. The rule 3 has classified sectors/industries under Regulated and Non-Regulated sectors.
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What is the main qualification of cost auditor?

Cost Accountant includes a Firm of Cost Accountants and a LLP of cost accountants. This means, only a Cost Accountant, as defined under section 2(28) of the Companies Act, 2013, with valid certificate of practice is qualified to get appointed as a cost auditor.
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How are auditors appointed and removed?

As per sub-section (1) of section 140, the auditor appointed under section 139 may be removed from his office before the expiry of his term only by a special resolution of the company, after obtaining the previous approval of the Central Government in that behalf.
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Are auditors appointed by shareholders?

Sections 489 to 491 restate the law on appointment of auditors of public companies, providing that auditors are generally to be appointed by shareholders by ordinary resolution in the general meeting before which the company's accounts are laid.
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Is it compulsory to appoint auditor for 5 years?

The subsequent Auditor i.e. appointed after the first Auditor for specified class of companies shall hold the office: Individual: For one term of 5 years and then a cooling period of 5 years is to be provided i.e. can be re-appointed after a break of 5 years.
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What is the procedure of cost audit?

(1) Name and address of the registered office of the company whose accounts are audited. (2) Name and address of the Cost Auditor. (3) Reference number and date of Government Order under which the audit is conducted. (4) Reference number and date of the Government letter approving the appointment of the Cost Auditor.
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What are the duties of Cost Auditor?

The role of a Cost Auditor is to examine and verify the correctness of the Cost Accounting books and other costing records and to make sure that the records maintained are in conformity with the Cost Accounting standards and other provisions laid down under the Act.
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Is cost audit a statutory audit?

While reckoning the experience as statutory auditor, the cost audit conducted under section 148 of the Companies Act, 2013 is not considered as statutory audit.
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Can you appoint an auditor after year end?

Although early appointment is preferable, an independent auditor may accept an engagement near or after the close of the fiscal year.
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Which resolution is required for appointment of auditor?

All companies, except for a Government Company are required to appoint the first Auditor of the Company within 30 days of registration of the company at the meeting of the Board of Directors of the Company.
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Can I appoint 1 year auditor?

The C&AG cannot appoint an auditor for more than one financial year at a time. Further, the C&AG is responsible to appoint auditor or audit firm within a period of 180 days from the commencement of the financial year.
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How do you appoint an auditor in a casual vacancy?

1. Obtain certificate in writing from the proposed auditor confirming his eligibility to be appointed. 2. Convene a Board meeting within 30 days of arising casual vacancy after giving notice to all directors and pass resolution appointing the new auditor in the place of old auditor.
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How an auditor is appointed under the Companies Act, 2013?

According to Companies Act, 2013 section 139(6) the first auditor of the company other than a government company shall be appointed within 30 days of the incorporation by the Board. In case of the Board's failure, within 90 days an EGM shall be held for appointing the first auditor.
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How do you know if cost audit is applicable?

Applicability of Cost Audit
  1. Overall annual total turnover of all the products/services should be INR 100 Crore or more; and.
  2. Aggregate turnover from the individual product/service for which cost records are required to be maintained should be INR 35 Crore or more.
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