MCA has vide notification dated 14th July, 2016 amended the Companies (Cost Records & Audit) Rules, 2014 as follows:
- Rule 2(d) has been substituted as follows: “(d) “cost audit report” means the duly signed cost auditor’s report on the cost records examined and cost statements which are prepared as per these rules, including attachment, annexure, qualifications or observations attached with or included in such report;” What has been added is “cost records examined and cost statements which are prepared as per these rules”
- Proviso has been added to Rule 6(1) as follows:“Provided that before such appointment is made, the written consent of the cost auditor to such appointment, and a certificate from him or it,as provided in sub-rule (1A), shall be obtained”;
- A new sub Rule 6(1A) has been added after Rule 6(1) as follows: “(1A) The cost auditor appointed under sub-rule (1) shall submit a certificate that─(a) the individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Cost and Works Accountants Act, 1959(23 of 1959) and the rules or regulations made thereunder; (b) the individual or the firm, as the case may be, satisfies the criteria provided in section 141 of the Act, so far as may be applicable; (c) the proposed appointment is within the limits laid down by or under the authority of the Act; and (d) the list of proceedings against the cost auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.”;
- Three new provisos have been added in Rule 6(3) as follows: “Provided that the cost auditor appointed under these rules may be removed from his office before the expiry of his term, through a board resolution after giving a reasonable opportunity of being heard to the Cost Auditor andrecording the reasons for such removal in writing; Provided further that the Form CRA-2 to be filed with the Central Government for intimating appointment of another cost auditor shall enclose the relevant Board Resolution to the effect; Provided also that nothing contained in this sub-rule shall prejudice the right of the cost auditor to resign from such office of the company.”;
- A new sub-Rule (3B) added after present Rule 6(3A) as follows: “(3B) The cost statements, including other statements to be annexed to the cost audit report, shall be approved by the Board of Directors before they are signed on behalf of the Board by any of the director authorised by the Board, for submission to the cost auditor to report thereon”;
- Rule 6(5) has been substituted as follows: “(5) Every cost auditor shall forward his duly signed report to the Board of Directors of the company within a period of one hundred and eighty days from the closure of the financial year to which the report relates and the Board of Directors shall consider and examine such report, particularly any reservation or qualification contained therein.”; What has been changed is “duly signed report” which was not there in earlier version.
- Rule 6(6) has been substituted as follows: “(6) Every company covered under these rules shall, within a period of thirty days from the date of receipt of a copy of the cost audit report, furnish the Central Government with such report alongwith full information and explanation on every reservation or qualification contained therein, in Form CRA-4in Extensible Business Reporting Language format in the manner as specified in the Companies (Filing of Documents and Forms in Extensible Business Reporting language) Rules, 2015 alongwith fees specified in the Companies (Registration Offices and Fees) Rules, 2014.”. What has changed is the XBRL format of the Audit Report.