Cost Audit#
Legal Framework#
- Companies Act, 2013 (Section 148)
- Cost Accounting Records Rules
- Cost Audit Report Rules
Applicability#
Cost audit is mandatory when:
| Criteria | Threshold |
|---|---|
| Companies engaged in production | Turnover > ₹50 crore + aggregate borrowings > ₹25 crore |
| Certain industries | Reg Industries (cement, fertilizers, steel, etc.) |
| Any company as specified | By Central Government |
Industries Requiring Cost Audit#
- Cement
- Fertilizers
- Sugar
- Steel
- Aluminum
- Copper
- Petroleum
- Chemicals
- Pharmaceuticals
- Textile (if specified)
Cost Audit Process#
- Appointment of Cost Auditor
- Audit planning
- Verification of cost records
- Examination of cost statements
- Cost audit report
- Filing with MCA
Cost Audit Report#
- Form CRA-2 (appointment)
- Form CRA-3 (cost audit report)
- XBRL tagging
Exemptions#
- Companies having less than ₹50 crore turnover (in most cases)
- Companies in specified sectors with lower thresholds
Compliance#
- Cost records maintenance
- Cost audit report submission
- Board report disclosure