Form 23C

Every company required to conduct an audit of cost accounts under section 233B(2) of the Companies Act, 1956 had to file an application to the Central Government for the appointment of cost auditor. The company had to file form 23C with the Registrar of Companies (ROC) about the appointment of the cost auditor.

However, after introducing the Companies Act, 2013, a company that requires to conduct an audit of cost accounts must file a form of intimation of appointment of cost auditor to the Central Government as provided under the Companies Act, 2013 and its Rules. Thus, all companies must currently file the intimation of appointment of cost auditor to the Central Government in form CRA-2 under the Companies Act, 2013.

Form 23C Applicability

Under the Companies Act, 1956, the Central Government could issue an order directing the audit of cost accounts of a company by an auditor who is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959. It could issue an order for audit of cost accounts where it is of the opinion that it is necessary for a company to conduct a cost audit of its books of account as per Section 209(1)(d) of the Companies Act 1956.

Section 209(1)(d) of the Companies Act, 1956 states that when a company belongs to a class of companies engaged in processing, production, mining or manufacturing activities, the Central Government may require such particulars relating to utilisation of labour, material or other items of cost be included in the company books of accounts.

The company’s Board of Directors had to appoint a cost auditor as per the Companies Act, 1956 with the previous approval of the Central Government and file form 23C to the Central Government for the appointment of the cost auditor with the ROC.

Particulars of Form 23C

• Corporate Identification Number (CIN) of the company.
• Name, email and address of the company.
• Category of cost audit order (company specific order or industry-wise general order).
• Number and date of the Central Government’s order directing cost audit.
• Information of the cost auditor proposed to be appointed, including the category of cost auditor, PAN number, name, address, email, membership number of cost auditor or cost auditor’s firm, etc.
• Proposed remuneration of the cost auditor.
• The financial year for which the cost auditor is appointed.
• Date of the meeting of Board of Directors proposing the name of the cost auditor.
• Whether there is any change in the cost auditor. If yes, name and address of previous cost auditor, the reason for the change in the auditor, whether the change is due to the death of the existing cost auditor and whether the previous cost auditor is informed of the change.
• Verification and Digital Signature Certificate (DSC) of the managing director, director, manager or company secretary of the company.

Documents Required to File Form 23C

• Copy of the company board resolution sanctioning the proposal for which the government approval has been sought.
• Copy of the certificate obtained from cost auditor relating to compliance with Section 224(1B) of the Companies Act, 1956. 
• Optional attachments, if any.

Form for Appointment of Cost Auditor Under the Companies Act, 2013

The Companies Act, 2013 replaced the provisions of the Companies Act, 1956. Therefore, all the companies registered under the Companies Act, 1956 have to file their returns as provided under the Companies Act, 2013. Currently, all companies have to file form CRA-2 with the ROC intimating appointment of cost auditor to the Central Government and not form 23C. The details to be provided in the form CRA-2 are:

• Corporate Identification Number (CIN) of the company.
• Name, email and address of the company.
• Nature of intimation of appointment of cost auditor.
• Firm Registration Number (FRN) and name of the cost auditor, cost auditor’s firm or LLP.
• Date and reason for the casual vacancy.
• Details of the products or services to which the cost audit relates.
• Details of all the cost auditors appointed.
• Financial year for which the cost auditor is appointed.
• Whether there is any change in cost auditors appointed from the previous financial year.
• Declaration by a person authorised by the Board of Directors.
• DSC of the director, CEO, manager, CFO, authorised representative or company secretary.

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