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.
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.
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:
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