In India, the Ministry of Corporate Affairs (MCA) has mandated cost audit requirements for certain industries under the Companies Act, 2013. Companies engaged in the production of goods or provision of services with a turnover of Rs. 50 crores or more in the previous financial year, and companies engaged in the production, processing, manufacturing, or mining of specified products must comply with cost audit requirements. The cost auditor appointed by the company must be a qualified Cost Accountant holding a valid certificate of practice, as per the Cost and Works Accountants Act, 1959.
A Cost Accountant is a professional who is registered with the Institute of Cost Accountants of India (ICAI), which is the regulatory body for cost accounting in India. The ICAI conducts examinations and issues certificates of practice to qualified Cost Accountants. To become a qualified Cost Accountant, an individual must have completed the required education and training, passed the ICAI examinations, and obtained a certificate of practice from the ICAI.
The cost auditor appointed by the company must be an independent professional who is not an employee of the company. The cost auditor is responsible for conducting a thorough examination of the company's cost records and submitting a report to the board of directors. The cost audit report must comply with the Cost Audit Report Rules, 2011, and provide accurate information about the costs associated with the production of goods or provision of services.
In summary, a qualified Cost Accountant registered with the ICAI can be appointed as a cost auditor for a company that is required to comply with cost audit requirements. The cost auditor must be an independent professional who is not an employee of the company and is responsible for conducting a thorough examination of the company's cost records and submitting a report to the board of directors.
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