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CS Professional · Compliance Management, Audit and Due Diligence · Concepts of Various Audits

Ganga Foods Ltd manufactures products that fall under a regulated sector and is covered by the cost records rules. Its board asks whether the cost auditor must be a member of a particular body. Who may be appointed as cost auditor of a company?

The cost auditor must be a cost accountant in practice, meaning a member of the Institute of Cost Accountants of India holding a certificate of practice. Chartered accountants, company secretaries or advocates cannot act as cost auditor merely by their own professional status.

  1. AA practising chartered accountant
  2. BA practising company secretary
  3. CA cost accountant in practice holding a valid certificate of practiceCorrect
  4. DAny advocate with ten years of practice

Explanation

Only a cost accountant in practice, a member of the Institute of Cost Accountants of India holding a certificate of practice, can be appointed as cost auditor. Chartered accountants, company secretaries and advocates are not eligible for this role unless they also qualify as cost accountants in practice.

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