Brief on the General Circular No. 15/2011 dated 11th April, 2011, issued by the Ministry of Company Affairs on appointment of Cost Auditor

1.       Appointment of Cost Auditor will not require prior approval from the Central Government.

2.       Appointment of Cost Auditor – First point of Reference is Audit Committee (AC)

3.       Companies where Audit Committee (CA) not required by Law, Board of Directors (BOD) be the first point of reference.

4.       Audit Committee/Board of Directors to ensure such appointment is free from disqualification U/Sec 233B (5) & 224(3) & (4) of the Companies Act.

5.       Compliance form Cost Auditor & Audit Committee, on non violation of limits of U/ Sec 224 ( 1-B)

6.       Audit Committee/BOD to obtain Certificate form Cost Auditor certifying its independence.

7.       Company to file form 23C by 90 days of start if financial year along with: -

i)                    Board Resolution for appointment of Cost Auditor.

ii)                   Certificate from Cost Auditor – Compliance U/Sec 224(1-B)

8.       E-form approved by Central Govt. (CG) by 30 days. If not approved to be resubmitted as per details requested.

9.       Company to issue formal letter of appointment to Cost Auditor approved by the Board with in 30 day of approval of E-Form.

10.   Cost Auditor to file E-Form 23D within 30 days of appointment.

11.   Disclosure by Companies in Annual Return about Cost Auditor, Due & Actual date of filling of Cost Auditor Report.

12.   Contravention of provisions of this Circular: -

i)                    Companies – Punishable U/Sec 642(2)/209(5) & (7)/233B(11) of The Companies Act, 1956.

ii)                   Cost Auditor – Fine extended to Rs. 5000/-

·         FAQ on Cost Auditor Appointment