New cost audit norms hike penalty ten-fold

new delhi: the new rules for cost audit report require companies to submit their certified reports within 180 days from the close of their financial year. the new rules notified recently by the department of company affairs, supersede the cost audit (report) rules, 1996 though the action taken under old set of rules will be protected. non-compliance with the provisions of the new rules will attract penalty of rs 5,000. the penalty has been increased ten-fold in line with the similar increase in penalty for contravention of the provisions of the companies act, 1956. under the rules, cost auditors as well as directors of the company can be held liable for default. the new rules, to come into effect immediately, will apply to every company where an audit of the cost accounting has been ordered by the central government. cost audit reports submitted on or after october 1, 2002, irrespective of the year to which it relates, will be required to be in the form prescribed under the new rules. a government statement issued here today said the cost auditor of the company will be required to respond to the communication from the central government within 30 days of receipt of the communication addressed to him for any clarification. companies would be required to make available all material information to the cost auditor within 135 days from the close of the financial year. companies will be required to render all assistance to the cost auditor. further, the board of directors of the companies will be required to approve all the annexures and performa prescribed for the cost audit report.