A statutory cost audit is a mandatory examination of the cost records of a company by a registered Cost Auditor (a Fellow Member of ICMAI). It is conducted under Rule 4 of the Companies (Cost Records and Audit) Rules 2014, notified under Section 148 of the Companies Act 2013.
The objective is to verify that the cost records maintained by a company are accurate, that costs have been computed in accordance with the Cost Accounting Standards (CAS), and that the company's financial statements fairly reflect the cost of production and cost of sales.
The Cost Audit Report is filed in Form CRA-3 with the Ministry of Corporate Affairs (MCA) in XBRL format within 180 days from the close of the financial year (i.e., by 30th September each year for FY ending 31st March).
Section 148, Companies Act 2013
Companies (Cost Records and Audit) Rules 2014
CRA-3 (XBRL) within 180 days of financial year end
Registered Cost Auditor (FCMA/ACMA, ICMAI)
Up to ₹5 lakh (Company) + ₹1 lakh (per officer)
Cost audit is mandatory for companies in specified industries meeting the turnover criteria under Rule 4.
Crude oil refining, petroleum products
Bulk drugs, formulations
Nitrogenous, phosphatic, potassic
Sugar (all grades), khandsari, jaggery
Generation, transmission, distribution
Basic & mobile telephone, ISP
All categories of steel products
OPC, PPC, blended cement
4-wheelers, 2-wheelers, components
Rubber-based automotive products
Writing/printing paper, boards
Cotton yarn, synthetic, woven fabrics
A structured, transparent audit process designed for accuracy, compliance, and zero MCA queries.
Board resolution appointing the cost auditor, consent letter, and intimation to Central Government (filing of CRA-2 with MCA).
Examination of existing cost records, production records, inventory statements, utilities data, and overhead allocation methodology.
Physical verification of manufacturing processes, cost centres, quantity records, and interview of plant finance and operations teams.
Detailed verification of cost statements against Cost Accounting Standards (CAS 1–24), cross-checking with financial accounts, and detection of variances.
Preparation of Cost Audit Report (Form CRA-3) including product-wise cost statement, annexures, and auditor's observations.
Conversion of CRA-3 to XBRL format and filing with MCA within 180 days of year-end. Copies forwarded to the company's Board of Directors.
Our dedicated XBRL team ensures MCA filings are accepted without resubmission requests. 100% acceptance rate over the last 5 years.
We have never missed the 180-day MCA filing deadline in 8 years of practice. Internal timelines are set 30 days ahead to accommodate revisions.
Experience conducting cost audits for companies with 2–15 manufacturing plants across multiple states, with coordinated reporting.
