Managing Director of Lalitha Lubricants Ltd, wants to know the following from you, as a Company Secretary in practice, (a) the qualification, if any for appointment as a cost auditor (b) the authority who appoints the co

Note to Managing Director of Lalitha Lubricants Ltd. Respected Sir, Subject: With reference to the query on the qualifications, appointment etc. of Cost Auditor, the clarifications are provided as under: a) Qualification of Cost Auditor: As per Section 148(3) of the Companies Act, 2013 Cost audit shall be conducted by a Cost Accountant. Provided that no person appointed under section 139 as an auditor (Statutory Auditor) of the company shall be appointed as the Cost Auditor. Also, Section 148(5) read with Section 143(14) of the Companies Act, 2013 provides that the qualifications, disqualifications, rights, duties and obligations applicable to Statutory Auditors and Secretarial Auditor shall, so far as may be applicable, also apply to a Cost Auditor. b) Appointing authority: Section 148(3) read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014 prescribes that the Board of Directors shall appoint an individual, who is a cost accountant, or a firm of cost accountants in practice, as cost auditor on the recommendations of the Audit committee (if the Company has such a Committee, as the case may be) which shall also recommend remuneration for such cost auditor. The remuneration recommended by the Audit Committee shall be considered and approved by the Board of Directors and ratified subsequently by the shareholders. c) Cost Audit report format: Every cost auditor, who conducts an audit of the cost records of a company, shall submit the cost audit report along with his or its reservations or qualifications or observations or suggestions, if any, in Form CRA-3 [Rule 6(4) of the Companies (Cost Records & Audit) Rules, 2014]. d) Filing by company: As per Rule 6(6) of the Companies (Cost Records & Audit) Rules, 2014, every eligible company shall, within a period of 30 days from the date of receipt of a copy of the cost audit report, furnish the Central Government with such report along with full information and explanation on every reservation or qualification contained therein, in Form CRA-4 in Extensible Business Reporting Language format along with fees specified in the Companies (Registration Offices and Fees) Rules, 2014. Hope the queries raised are clarified. XYZ Company Secretary