The Cost Auditor appointed shall submit a certificate that –

(a) The individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act (the Cost and Works Accountants Act, 1959) and the rules or regulations made thereunder ;

(b) The individual or the firm, as the case may satisfy the criteria provided in Section 141 of the Companies Act, 2013 so far as may be applicable ;

(c) The proposed appointment is within the limits laid down by or under the authority of the Act; and

(d) The list of proceedings against The Cost Auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.

Yes, the Cost Auditor of a company is required to give a certificate to the Audit Committee in respect of his/her/its independence and arm’s length relationship with the company.

Moreover, according to the Second Schedule, Part I, Clause 4 of the Cost and Works Accountants Act, 1959, it amounts to professional misconduct when a Cost Auditor expenses his/her/its opinion on cost and pricing statement of any business or enterprise in which he/she, his/her firm or a partner of his/her firm has a substantial interest.

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