BACA Intellect Series – CRA Edition 2
Procedure of Appointment of Cost Auditor
Procedure of appointment
As per Rule 14 of the Companies (Auditors & Audit) Rules, 2014, the Cost Auditor shall be appointed in the following manner:
(a) in the case of companies which are required to constitute an audit committee, the Board of Directors shall appoint Cost Auditor on the recommendations of the Audit committee.
(b) in the case of other companies which are not required to constitute an audit committee, the Board of Directors shall appoint Cost Auditor.
Remuneration of the Cost Auditor
Section 148 (3) of the Companies Act, 2013 requires that the remuneration of the Cost Auditor shall be determined by the members in a prescribed manner.
Manner of determination of remuneration
As per Rule 14 of the Companies (Auditors & Audit) Rules, 2014, the remuneration of Cost Auditor shall be determined in the following manner:
(a) The remuneration of Cost Auditor shall be recommended by the Audit Committee in the case of companies which are required to constitute an Audit Committee. The remuneration recommended by the Audit Committee shall be considered and approved by the Board of Directors and ratified by the shareholders subsequently.
(b) In the case of other companies which are not required to constitute an Audit Committee, the Board of Directors shall determine the remuneration of Cost Auditor which shall be ratified by shareholders subsequently.
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