Cost & Management Audit Flashcards
Section 148 of companies act 2013.
Central government एक order ke द्वारा उन class of companies के लिए जो engage हैं production of goods & supply of service मैं as may be prescribed direct कर सकती की all the particular of relating to utilisation of matterial & labour or the item of cost ad may be prescribed shall be included in the book of accounts maintained by such class of companies.
Provided that की CG ऐसा कोई भी ऑर्डर pass करने से पहले in respect of any class of companies regulated under a special act, consult करेगी उस regulatory body se jo constitute की गई या established है under such special act,
CG की अगर ये opinion hai that it is necessary to do so, it may by order direct कर सकती है की audit किया जाएगा cost records का of such class of companies जो कि sub section (1) मैं है which may have net worth of such amount as may be prescribed or turnover of such amount as may be prescribed shall be conducted in the manner specified in the order.
Audit किया जाएगा cost accountant in practice के द्वारा appointed by BOD on such remuneration as may be determined in such manner as may be prescribed. Auditors appointed under sec 139 shall not be appointed as cost auditor.
General objective & social objective of cost audit.
- Detection of fraud & error.
- Determination of inventory valuation.
- Facilitate the fixation of price of good & service
- periodical reconciliation between cost & financial accounts
- Ensuring optimum utilisation of human, physical, & financial resources of the enterprise.
- Detection & correction of abnormal loss of material & time.
- inculcation of cost consciousness.
Social objectives:
- whether pricing of product are justified as per the product & quality is concerned.
- To remove the disparity if any in the pricing of product & service.
- to look that no cost based economic imbalance may occur in product & service.
- to facilitate in global market cost competitiveness of the product.
Regulated & unregulated sector
Regulated sector वह होता है जहां price determination government से consultation के बाद किया जाता है
- Telecommunication service
- Electricity service
- petrochemical industries
-Drug & pharmaceutical
- Sugar
- Industrial alcohol
Non regulated sector -
यहां price determination me government ka कोई भी role nahi hota.
Applicability of maintenance of cost records. RULE -3
Regulated & unregulated sectors जिनका turnover >= 35 CR maintain करेंगी cost records.
MSME is exempted from maintaining cost records.
Applicability of cost audit Rule -4
Regulated sector :
हर company जो कि regulated sector main आती है उस को अपने cost records ko audit करवाना पड़ेगा if overall turnover company का from all product & services during the immediatly preceding FY Exceeding 50 cr. Ya aggregate turnover of individual product or service जिस के लिए cost record maintain किए गए हैं वह >= 25 cr है।
हर company जो unregulated sector मैं आती है उस को अपने cost records को audit करवाना पड़ेगा अगर overall turnover of company from all its product & service during immediately preceding FY exceed ₹100 cr or more and individual product or products or service or services for which cost records are maintained exceed ₹30cr or more.
Exeception of cost audit Rule :
Cost audit shall not apply to following companies covered in rule 3 :
• company जिसका revenue from export in foreign exchange exceeds 75% of total revenue.
OR
• जो कि operate कर रही हैं SEZ से
OR
• जो कि engaged हैं in production of electricity under captive consumption
Types of form
CRA -1 form in which cost records are maintained.
CRA -2 Form of intimation of appointment of cost auditor by the company to CG
CRA-3 Form of cost audit report
CRA-4 Form for filing cost audit report with central government.
Maintenance of Record - Rule 5
हर company under this rule including (जिसमे शामिल है) all units & branches shall in respect of its FY जो शुरू हो रहा है on या after 1-4-2014 maintain करेंगी cost record in form CRA -1.
cost record maintain किए जायेंगे इन regular manner ताकि वह facilitate करें in calculation of unit cost of production / cost of operation / cost of sales & margin हर product ओर activities के लिए हर FY के लिए monthly, quarterly, half yearly, annual basis pe.
Cost record maintain किए जायेंगे इस तरह की वह enable करें कंपनी को exercise करने मैं control on various opreations & cost to achieve optimum utilisation of resources ओर ये रिकॉर्ड provide करेंगे necessary data which required to be furnished under these rule.
Cost audit Rule -6
Company जो specified की गई है rule 3 मैं जिसकी threshold limit laid down in rule 4 180days के अंदर from the commencement of every FY shall appoint cost auditor.
Company inform करेगी कोस्ट ऑडिटर को उस के appointment के बारे मै और फाइल करेगी एक नोटिस CG ko इस appointment ke बारे में 30 days के अंदर of appointment या 180 days from the commencement of FY जो पहले हो। Through electronic mode in form CRA-2 alongwith the fees.
हर cost auditor जो appoint किया गया in such capacity shall continue till the expiry of 180 days from the closure of FY या जब तक वह cost audit report submit नहीं कर देता उस FY के लिए जिस के लिए वह appoint Kia गया है। Cost auditor को remove किया जा सकता उस के term ke expire होने से पहले BR ke द्वारा उसे सुने जाने का मौका देकर। Further form CRA -2 file किया जाएगा CG के पास intimate करने के लिए about new appointment of cost auditor & recording the reason of such removal in writing, he also has right to resign from office of company.
Casual vaccancy auditor के office me due to resignation, death,or removal shall be filed by the BD with in 30days of occurrence of such vaccancy in form CRA-2 within 30days of such appointment of cost auditor.
cost statement के साथ other statement भी annexed किया जाएगा cost audit report ke saath और shall be approved by the BOD और उसके पहले उसे sign किया जाएगा किसी director ke द्वारा on behalf of board for submission to the cost auditor to report thereon।
हर cost auditor जो audit conduct करेगा cost record को वह submit करेगा cost audit report अपने reservation, qualification, observation, ओर suggestion if any के साथ in form CRA -3
Cost auditor forward करेगा अपने द्वारा signed report to BOD of company within 180 days from the closure of FY to which the report relate और BOD consider ओर examine करेंगे उस report को particularly any reservation or qualification contained there in.
हर company जो covered hai इन rules मैं वह 30 days के अंदर from the date of receipt of report furnish करेगी CG उस रिपोर्ट के साथ Full information & explanation on every reservation or qualification contained there in इन Form CRA-4 in xbrl format.
Cost audit documentation
Audit help करता है detect करने में errors aur frauds को provide करता है suggestion to improve them जो कि बदले मे help करता managment की corrective actions लेने में।
Audit process को complete करने के लिए one need to gather the document related to audit process.
Cost audit documentation का मतलब है material जिस मै शामिल है working papers prepared by or obtained & retained by the cost auditor in connection with the performance of audit.
Requirement of cost audit documentation
Cost auditor as a part of audit documentation record करेगा audit procedures जो perform करे गए हैं, जो relevant audit evidence obtained किए गए है और जिन conclusions पर पहुंचा गया है (reached)
Cost auditor तैयार करेगा audit documents ko is तरह की वो sufficient रहे enable करने मैं another competent person को जिसका कोई प्रीवियस कनेक्शन नही है said audit से इसमें include hai वो person jo peer review undertake (कर रहा है) to understand:
- conformance of audit procedures performed with legal & regulatory requirements.
-conformance to cost auditing standards
- the result of audit procedures performed
- the audit evidence obtained
- significant matter arising during the audit, conclusions reached there on & significant professional judgement made to reach those conditions.
Cost auditor record करेगा discussion of significant matter with client personel & outsiders.
Cost auditor record करेगा कोइ भी departure from the standard requirement in cost auditing standard
Cost auditor prepare करेगा audit documentation on a timely basis
Exceptional circumstances cost auditor perform करेगा कोइ new या additional audit procedures या draw करेगा new conclusions after the date of cost audit report
Cost auditor assemble करेगा audit documents को in an audit file.
Content of cost audit documentation
- Rule regarding the prepration of cost records जो prescribed किए गए है companies act मैं।
- cost accounting standards prescribed by institute
- generally accepted accounting principle prescribed by institute
Audit programmes
Cost audit मैं जो analysis किया जाता है वह relies करता है ज्यादा analytical review पर than on subsatantive testing to establish true & fair view
Audit query list which contains a log of audit queries raised & their resolution
Abstract of significant contracts relating to cost & revenue
Letter of confirmation
Abstract copies of entity’s record
Matter to be included in cost audit documentation
Description उस product ka जो entity produce करती है या जो service provide करती है।
Organisational chart जो show करता है responsibility center और person responsible
Description in form of a flow chart of manufacturing process
Internal control over material cost labour cost & expense
Risk material misstatements जो assess की गई है स्क्रैप recovery ओर disposal ke respect मैं।
Test of materiality used
Overall audit strategy & plan
Significant matter noted during the audit & conclusions reached
Audit file
एक या एक से ज्यादा folder or other storage media in physical or electronic form containing the records that comprise of audit documentation which are directly or indirectly linked with audit process.
Cost auditor को असेंबल करने चाहिए ऑडिट documentation in an audit file.
Final audit file complete हो जानी चाहिए reasonable time मै after completion of audit.
After the assembly of final audit file कि complete auditor ना तो delete करेगा ना ही discard करेगा audit documentation को of any nature before the end of its retention period
Current audit file
जो भी correspondence किया जाता है relating to acceptance of annual reappointment.
Extract of important matter related to minutes of board meeting or general meeting relevant to audit
Copies of management letters
Analysis of transactions & balance
Copies of communication with other auditors experts & third parties
Audit programmes
Conclusions reached on significant aspects of audit.
