What is the limit of cost audit?

Cost audit shall be conducted by the cost accountant who is appointed by the Board; In case of any default on the part of the company, it shall be punishable with the fine of an amount not less than INR 25,000, however, such fine cannot be more than INR 5 Lakhs.

What are the conditions under which cost audit is conducted?

The criterion is two pronged: overall and product-specific turnover. Both criteria are required to be fulfilled. Companies whose revenue from exports in foreign exchange exceeds 75% of its total revenues or companies operating from special economic zones are exempt from the requirement of cost audit.

Which companies are required to maintain cost records?

The Company including foreign Company whether operating in regulated or non-regulated sectors having overall turnover of 35 crores or more in preceding Financial year shall maintain the Cost records of such products or services specified in the table A and B of Rule 3 of The Companies (Cost Records and Audit) Rules, ...

How do you do 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.

Who needs cost audit?

Cost Audit is a legal compulsion for: Every company cited in item (A) of rule 3 whose yearly turnover during the immediately preceding FY is Rs 50 crores or more.

Applicability of Cost Audit |Section 148 of Companies Act, 2013 |CMA CA CS CMA Paper-19 l Lecture-1

What is cost audit explain its importance and limitations?

Cost audit helps in detection of errors and frauds. The management gets accurate and reliable data based on which they can make day-to-day decisions like price fixation. It helps in cost control and cost reduction. It facilitates the system of standard costing and budgetary control.

Can CA do cost audit?

30 March 2010 Yes. CA can be appointed as cost auditor.

Which industry are not subject to cost audit?

Regulated sectors include industries like petroleum products, drugs and pharmaceuticals, fertilizers, and sugar to name a few. While, the unregulated sectors cover industries, such as arms and ammunitions, cement, tea and coffee, milk products, and turbo jets and propellers, among others.

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.

Why cost audit is done?

A cost audit represents the verification of cost accounts and checking on the adherence to cost accounting plan. Cost audit ascertains the accuracy of cost accounting records to ensure that they are in conformity with cost accounting principles, plans, procedures and objectives.

Is cost audit applicable to NBFC?

Cost audit applicability for Non-Regulated Sectors – Cost audit is applicable if overall turnover of the company is Rs. 100 crore or more and aggregate turnover of individual products or services covered in Table-B is Rs. 35 crore or more in the immediately preceding financial year.

What is cost record verification?

Verification of the cost accounting records such as the accuracy of the cost accounts, cost data, cost reports, cost statements and costing techniques adopted by a company. Examination of these records to ensure that they adhere to the cost accounting principles, plans, procedures and objectives.

What is scope of cost audit?

What is the scope of audits? Initially, the scope of audits was limited to verifying official transactions. However, more recently, it has been extended to other fields, including cost audit. Cost audits seek to verify the correctness of cost records or cost accounts.

What are types of cost audit?

The following are the important types of Cost Audit: Efficiency Audit. Propriety Audit. Statutory Audit.

What are the requirements of cost audit and financial audit?

Cost audit is an independent examination of the correctness of the cost statements and accounts and its conformity with the cost accounting plan. Financial audit is a systematic unbiased examination of a company or institution's finance books and records, so as to express the opinion on it.

Which audit is compulsory by law?

Statutory Audit means an audit which is compulsory by any statute.

Is cost audit applicable to construction company?

(d) As on date, no cost audit is applicable on the companies engaged in the construction and/or development (real estate) business.

How many audits can CMA do?

CMAs are allowed to do financial Audit, Internal Audit, GST Audit, Excise Audit, VAT audit, stock audit, etc.

Can a CMA do tax?

No. US CMA does not give you any attestation authority. Qualified CMA's cannot be appointed as an auditor.

Can CMA become auditor?

Since CMA cannot be appointed as auditors, question of the power to sign such audit reports does not arise. However, they can be CFO's and CEO's and sign financial statements in that capacity but not under the capacity of an auditor.

What is the meaning of cost audit?

Cost audit is the verification of cost accounts to determine the accuracy of cost accounting records. It is a means to ensure that cost accounting records are in track with the costing principles, plans, procedures and objective. The audit usually involves. Verification that costing records are accurate.

What are the important aspects of cost audit?

What is cost audit planning?

Cost audit is an independent examination of cost statement, cost records and other related information of an entity including a non profit entity, when such an examination is conducted with a view to expressing an opinion thereon. Cost Auditor. 'Cost audit' is an auditor appointed to conduct an audit of cost records.