Companies cost records and audit rules
- CMA Amit Kumar
- Jul 21, 2025
- 2 min read
Companies act, 2013 as amended fix a liability on statutory auditor of the company for the maintenance of cost records of the company based on turnover and other criteria. It is a legal compliance which statutory auditor has to comply like any other compliance and mention in its independent audit report.
Meaning of Cost Records
Cost Records means books of accounts relating to utilization of materials, labour and other item of cost as applicable to the cost of production of goods & services as provided in sec 148 of the act.
Following are the criteria based on which cost records are applicable:
Company shall engage in production of specified goods or services.
Overall turnover from all of its products and services shall be equal or greater than 35/25 (Preceding financial year) crores as per Specific table A or B.
Micro enterprises or a small enterprise as per MSMED Act, 2006 have been taken out of the purview.
The form CRA-1
The form in which cost records shall be maintained. The form categorizes the requirement of maintain proper detail as per headings. The headings are :
(1) Material Cost,
(2) Employee cost
(3) Utilities
(4) Direct Expenses
(5) Repair & Maintenance
(6) Fixed asset and Depreciation,
(7) Overheads
(8) Administrative Overhead
(9) Transportation Cost
(10) Royalty and Technical know-how
(11) Research and development expenses
(12) Quality control expenses
(13) Pollution Control Expenses
(14) Service Department Expenses
(15) Packing Expenses
(16) Finance cost,
(17) Any other item cost
(18) Capacity Determination
(19) Work-in-progress and finished stock
(20) Captive Determination
(21) By-Product and Joint Products
(22) Adjustment of Cost Variance
(23) Reconcialtion of cost and Financial Accounts
(24) Related Party Transactions
(25) Expenses or Incentives on Exports
(26) Production records
(27) Sales Records
(28) Cost Statement
(29) Statistical Records
(30) Records of Physical Verification
(31) Unit of Measurement.
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