Appointment of cost auditor

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 Dear All,

We are appointing Cost Auditor For FY 2016-17. Can anyone please provide the procedure for the same. Further,

The AGM of the Company was held on 30th September, 2016. Is it possible that remuneration is ratified at next AGM and the Auditor is appointed after 180 days i.e. 30th September?

[satish gupta]

Cost Auditor appointment procedure is as follow:

1. Company need to check Cost Audit applicability.

2. Then Company should appoint within 180 days from the starting of the financial year. Means for the year 2016-17 it should be before 30th Sep'16.

3. If Company could not appoint within time limit then company is liable for penalty. Which is not very huge amount. (Normal filing fee is 600/- and max. penalty is 6800/-)

4. For appointing Cost Auditor company need to appoint practicing Cost auditor.

5. Then company issue a requisition letter to cost auditor for showing its willing to appoint him as a cost auditor in company.

6. After getting requisition letter cost auditor will sent his consent letter as per companies act.

7. After getting consent letter company will call a board meeting and put consent letter in board meeting and pass a resolution for appointing cost auditor.

8. Then Company Secretary of the company will file CRA-2 with the attachment of Resolution and consent letter.

If Still you have doubt you can ask.

Enclosing here a Excel Sheet which tool for checking cost audit applicability.

Thanks & Regards

Satish Kumar Gupta (CMA, CS, M.Com)
Practicing Cost Accountant 

Cell: +91 98276 70006

Indore- 452012, (M.P.)