Sudhanshu Shekhar (Self Employed) (27 Points)
13 September 2012Dear friends
This is query about applicability and appointment of cost auditors:
If a comapny fall under the perview of cost audit for 1st time by what time it should appoint cost audit in regard to financial year 11-12 and 12-13.
And what is procedure and penalties if any?
RAKESH
(Almost CA)
(2199 Points)
Replied 13 September 2012
I think its 90 days from the start of the financial year and if that has been crossed then appoint immediately and file some form to ROC. MCA Circular is attached for ur reference.
Rahul Jain
(Rahul Jain & Associates. (Cost Accountants))
(795 Points)
Replied 13 September 2012
Dear Sudhanshu,
Last date for appointing the cost auditor was 29th June 2012.
Procedure for appintment:-
1) Pass a board resolution for appointment of cost auditor.
2) Take letter of disqualification and arm's lenght relationship from Cost Auditor.
3) After taking both the letters file the form 23 C on MCA,stating appointment of Cost Auditor.
4) If within one month govt doesnt have any query then its deemed appointment.
5) Issue an letter of appointment to Cost Auditor for Appointment.
6) After receiving the appoitment letter Cost Auditor will file form 23 D regardding confirmation to govt.
Regarding Penalties its now :-
Period of Delay Fee Payable with the application Form 23 C
Up to 30 Days Two times t normal fee
More tha 30 & less than 60 Four times t normal fee
More tha 60 & less than 90 Six times t normal fee
More than 90 Days Nine times t normal fee
Normal Fee:-
Its b/w Rs 500 to 200 depending upon company to Company...
Please let me know in case of any other clarifications:-
Thanks and Regards:-
CMA Rahul Jain
E-Mail:- rahuljain @ jmsandco.in
CMA Dinesh Kumar Singh
(Manager - Finance)
(62 Points)
Replied 14 September 2012
Agree with CMA Rahul Jain.
Swati Baidya
(Legal & Compliance Officer)
(69 Points)
Replied 14 September 2012
Can you please xplain what exactly we need to mention in letter of disqualification and arm's lenght relationship from Cost Auditor.
Can you please provide any format for that?
Thanks & Regards
Swati Baidya
Rahul Jain
(Rahul Jain & Associates. (Cost Accountants))
(795 Points)
Replied 14 September 2012
Dear Swati,
Link for letter of disqualification https://members.icwai.org/members/docs/practicekit/5A-Certificate-from-cost-auditor-under-sec-224-1B.pdf
and for letter of arms lenght relationship https://members.icwai.org/members/docs/practicekit/5B-Certificate-for-Independence-Arms-Length-Relationship.pdf
Thanks
CMA Rahul Jain
Sudhanshu Shekhar
(Self Employed)
(27 Points)
Replied 15 September 2012
Tnaks Mr. Rahul for your support.
But i am stil not cleared on the point that if a comapny liable for the forst time cost audit for the FY 11-12 after MCA notifiaction (i.e. first time specific cost audit order) then when it should appoint the cost auditor.
And when the first notification came into existance for applicability of cost audit.
If the company has not appointed cost auditor as of now waht are the consequnses for that.
Cost Audit Report for 2011-12 would also have to include comparative figures
for the years 2010-11 and 2009-10 (How it can be possible in the case of the company where cost audit applicable for the first time.)
Rahul Jain
(Rahul Jain & Associates. (Cost Accountants))
(795 Points)
Replied 15 September 2012
Dear Sudhanshu,
Auditor for 2011-12 was to be appointed within 90 days of notification and for 2011-12 within 90 days of financial year i.e. 29th june 2012......
Regarding previos years figures most of them can be derived from financial statements only............. and remaining can be calculated taking sm appropriate assumptions by mgt............
Thanks ...
CMA Rahul Jain
rahuljain @ jmsandco.in
*RENU SINGH *
(✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ )
(21627 Points)
Replied 16 September 2012
really nice explanation given by Rahul Sir
CAclubindia
