Applies when overall turnover is ₹50 crore or more and the turnover of the product or service covered is ₹25 crore or more.
Sectors include telecommunication, electricity, petroleum, drugs and pharmaceuticals, fertilisers and sugar.
Cost audit
Cost audit, from appointment to filing.
Cost audit under Section 148 of the Companies Act, 2013 tests whether a company keeps proper cost records and whether its cost statements are fair. This guide covers who needs one, the forms and the stages.
LawSection 148, Companies Act, 2013
RulesCost Records and Audit Rules, 2014
FormsCRA-1 · CRA-2 · CRA-3 · CRA-4
Report due180 days from year end
Sector, turnover and the product covered decide it.
Applies when overall turnover is ₹100 crore or more and the turnover of the product or service covered is ₹35 crore or more.
Covers industries not listed as regulated sectors.
Exemptions
- Companies earning more than 75% of total revenue from exports in foreign exchange.
- Units operating in a Special Economic Zone.
- Companies generating electricity for their own captive consumption.
Not sure where your company stands? Send us your last audited turnover and product mix and we will tell you.
Does cost audit apply to you?
Enter your figures to compare them with the thresholds above. This is a first indication only, based on the summary on this page.
Four forms carry the process.
Select a form to see who files it and when.
CRA-1
CompanyThe form for keeping cost records: materials, employee cost, utilities, overheads, cost of production and cost of sales, reconciled with the financial accounts.
One financial year, five dates to plan around.
Within 180 days of year startThe Board appoints the cost auditor.
Within 30 days of approvalThe company files CRA-2 (or within 180 days of year start, if earlier).
Through the yearCost records are kept in CRA-1 form. We can review them before year end.
Within 180 days of year endThe cost auditor sends the signed CRA-3 report to the Board.
Within 30 days of the reportThe company files CRA-4 with the Central Government.
See the cost audit calendar for a worked year and the records to keep ready.
What you receive
A signed report your Board can rely on.
- Product-wise and service-wise cost statements.
- Review of the cost accounting records and their adequacy.
- Observations on cost accounting policies and standards.
- Comment on the allocation of overheads and reconciliation with the financial accounts.
- The signed CRA-3 report, and support with the CRA-4 filing.
Four stages, one team.
Understand.We learn the products, plants and cost drivers.
Review.We examine the cost records and the costing system.
Verify.We test the figures and reconcile cost with the financial accounts.
Report.We issue the report and help with filing.
Based on the Companies (Cost Records and Audit) Rules, 2014, as amended. Thresholds and dates can change, so confirm current rules with the partners before acting. The text of the Rules is available from ICMAI.
Need a cost auditor for this year?
The Board appoints the cost auditor within 180 days of the start of the financial year.