Lawzonline.com

 

 

 


 Home>>Bare Acts>>Back to Index

 

 

FORM OF THE COST AUDIT REPORT

See rule 2(c) and rule 4

I/We, Having appointed as Cost Auditor(s) under Section 233B of the Companies Act, 1956 (1 of 1956) of . (Mention name of the company) having its registered office at..(mention registered office address of the company) ( hereinafter referred to as the company), have examined the books of account prescribed under clause (d) of sub section (1) of section 209 of the said Act, and other relevant records in respect of the unit.(mention name and location of the unit) for the period / year(mention the financial year) relating to ..( mention name of the product or activity) maintained by the company and report, in addition to my / our comments in para 3 relating to auditors observations and suggestions, that -

1. (i) I/We have / have not obtained all the information and explanations, which to the best of my / our knowledge and belief were necessary for the purpose of this audit;

(ii) Proper cost accounting records, as prescribed under clause (d) of the sub section (1) of section 209 of the Companies Act, 1956, have / have not been kept by the company;

(iii) Proper returns adequate for the purpose of my / our Cost Audit have / have not been received from the branches not visited by me / us;

(iv)The said books and records give/do not give the information required by the Companies Act, 1956 in the manner so required;

(v) The cost statements in respect of product or activity under reference as specified in the Annexures / Proformae of Schedule I, Schedule II or Schedule III of the Concerned Cost Accounting Records Rules duly audited by me / us are kept in the company.

2. In my / our opinion, the companys cost accounting records have / have not been properly kept so as to give a true and fair view of the cost of production, cost of sales and margin of the product under reference as prescribed under the rules.

3. Based on my /our examination of the records of the company subject to aforesaid qualifications, if any, I / we give my / our observations and suggestions on the following;

(a) the adequacy or otherwise of the cost accounting system including inventory valuation in vogue in the company and suggestions for improvement thereof. The cost auditor shall also indicate the persistent deficiencies in the system, pointed out in the earlier reports but not rectified;

(b) the adequacy or the otherwise of the budgetary control system, if any, in vogue in the company;

(c) matters which appear to him to be clearly wrong in principle or apparently unjustifiable;

(d) cases, where price charged for related party transactions as defined in the respective Cost Accounting Records Rules is different from normal price, impact of such lower / higher price on margin of the product under reference shall be specified;

(e) areas where the company is incurring losses or where there is considerable decline in profitability, the cost auditor should comment on the reasons thereof including indicative break even point. The cost auditor shall also comment on the default, if any on the payments due to the Government, financial institutions and banks, penal interest levied thereon and its impact on the cost of sales and profitability;

(f) steps required to strengthen the company under the competitive environment especially with regard to need for protection from cheaper imports, if any;

(g) export commitments of the company vis--vis actual exports for the year under review. Also comment on comparative profitability and pricing policy of the company for domestic and export sales. Give impact of exports benefits / incentives offered by the Government on export profitability.

(h) The scope and performance of internal audit of cost records, if any, and comment on its adequacy or otherwise.

4. The cost auditor shall suggest measures for making further improvements in the performance in respect of cost control and cost reduction.

5. The Cost Auditor may also give his other observations and suggestions, if any, relevant to the cost audit.

Dated. This date of . 200.

At. (mention name of place of signing this report).

SIGNATURE & SEAL OF THE COST AUDITOR

MEMBERSHIP NUMBER

Notes:

(1) Delete words not applicable.

(2) Specify the title of the concerned Cost Accounting Records Rules made under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 which are applicable to the product or activity of the company.

(3) If as a result of the examination of the books of account, the Cost Auditor desires to point out any material deficiency or give a qualified report, he shall indicate the same against the relevant para (i) to (vi) only in the prescribed form of the Cost Audit Report giving details of discrepancies he has come across.

(4) The report, suggestions, observations and conclusions, given by the Cost Auditor under this paragraph shall be based on verified data, reference to which shall be made here and shall, wherever practicable, be included after the company has been afforded an opportunity to comment on them.

 

 

 

 

Central Bare Acts
State Bare Acts

  

 

 

 


Home | Law Dictionary | Law Schools | Law Digest | Bare Acts | Disclaimer |  Privacy Policy


  
  
 

 

 

Copy right : Indu Info (All rights reserved)