Page 155 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes
Did u know? After receiving the letter of his appointment, the cost auditor should
communicate with the previous auditor, if any, for his reaction. He must send his formal
acceptance of the assignment to the company or board of directors.

8.4.2 Eligibility for Appointment of Cost Auditor

The following persons are eligible to be appointed as cost auditor:
(i) Any such chartered accountant within the meaning of the chartered accountant act and has
passed examination of the Institute of Chartered Accountants of India, or

(ii) Cost accountant within the meaning of the cost and works accountants act, or
(iii) Other person, as may hold the prescribed qualification for a cost auditor.

8.4.3 Rights of a Cost Auditor

A cost auditor has the same rights in relation to an audit conducted by him under section 233-B
as an auditor of a company under section 227(1). The following are rights of a cost auditor:

(i) He has a right to get all facilities and assistance from the related company or organisation
to perform his duties as a cost auditor,
(ii) He has a right of check at all times to the records, accounts and vouchers of the company,

(iii) The company and every officer, in default of not providing the records, accounts, vouchers,
information, explanations, etc., to the cost auditor,
(iv) He has a right to get such information and explanations from the officers of the company
or organisation as he may think necessary for the performance of his duties as a cost
auditor.

8.4.4 Responsibilities of a Cost Auditor

The responsibilities and duties of a cost auditor have not been clearly given in the companies
act. The cost auditor is also required to perform the duties as are expected from auditors in
general. The main responsibilities of a cost auditor are:
(i) He should maintain his working papers as an evidence of his having carried out his duties,
(ii) He is responsible to answer any query required by the Central Government on a scrutiny
of the cost audit report submitted by him,
(iii) He is liable to the Company if he does not perform his duties properly or in right direction,
(iv) He also owes a legal responsibility to third parties who might have been misled by his
audit certificate.

Note Cost Auditor should not disclose any confidential information regarding company
and should not use such information for personal gain or gain of some other party.

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