Can we appoint a Cost auditor for more than one financial year? Please Justify
6 Replies
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(5128 Points)
Replied 27 May 2016
yes. You can. But subject to the ratification of share holders of the company.
Pallavi Moonka
(company sectretary)
(112 Points)
Replied 27 May 2016
Thank you Sir.
But will the ratification shall be required for each year during the term of appointment?
Jatin Bajaj
(CS)
(2930 Points)
Replied 27 May 2016
According to Rule 6(3) of Cost Audit Rules, Every Cost Auditor shall continue in such capacity of Cost auditor till expiry of 180 days from closure of Financial year or till he submit cost audit repoert for the financial year in which he is appointed.
Pallavi Moonka
(company sectretary)
(112 Points)
Replied 27 May 2016
| Originally posted by : Jatin Bajaj | ||
 |
According to Rule 6(3) of Cost Audit Rules, Every Cost Auditor shall continue in such capacity of Cost auditor till expiry of 180 days from closure of Financial year or till he submit cost audit repoert for the financial year in which he is appointed. |  |
the sub rule states this:
Every cost auditor appointed as such shall continue in such capacity till the expiry
of one hundred and eighty days from the closure of the financial year or till he submits
the cost audit report, for the financial year for which he has been appointed.
This makes a difference. Thats the reason behind my doubt.
No where is it restricted
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 30 May 2016
Statutory audit is mandatory for all companies right from incorporation, irrespective of size and profitability . Hence provision has been made for appointment of statutory auditor for longer duration. However, cost audit is not applicable in all companies and is dependent upon a number of factors including government policy, net worth/turnover of the company for the year etc. Hence the Act has not made provision for appointment of cost auditor for more than one year.
Rajnesh Gautam
(Company Secretary)
(62 Points)
Replied 01 June 2016
according to the rule 6(1) and 6(3). cost auditor is appointed every year. appointment of cost auditor is based on turnover. if he was appointed for more than one year then it may be, his service would no be required for next year if company has turnover less than specified limit. thats why legisilation did not mention the requirement for appointing cost auditor for more than one financial year
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