pvtltd.co

Audit & Assurance

Cost Audit

Cost audit under s.148 Companies Act 2013 — cost records maintenance (CRA-1), cost audit report (CRA-3), and MCA filing via CRA-4 for companies in specified industries.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineCost Audit

Cost audit under s.148 of the Companies Act 2013 — cost records (CRA-1), the cost audit report (CRA-3), and MCA filing via CRA-4 for companies in specified industries.

What is included
  • • Applicability check — industry, product coverage, and turnover thresholds under the Rules
  • • Cost records readiness review against CRA-1 expectations
  • • Coordination with the cost accountant and preparation of the CRA-3 report
  • • Board and AGM placement of the cost audit report
  • • CRA-4 filing in XBRL on the MCA portal
  • • Closure note with next year's compliance calendar
Documents required
  • • Trial balance and audited financial statements
  • • Product-wise cost data — materials, labour, overheads
  • • Cost records and annexures maintained under the Rules
  • • Prior cost audit reports or ROC communications, if any
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Section 148 of the Companies Act 2013
  • • Companies (Cost Records and Audit) Rules 2014
  • • Rule 3 of the Companies (Cost Records and Audit) Rules 2014
  • • Rule 4 of the Companies (Cost Records and Audit) Rules 2014
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Applicability

Run the applicability check

We confirm whether your industry and turnover put the company in scope of Rules 3 and 4 of the Cost Records and Audit Rules 2014.

Step 2Records

Review the cost records

We check that cost records are maintained in line with CRA-1 expectations and flag gaps before the audit starts.

Step 3Audit

Support the cost audit

We coordinate with the cost accountant, supply the data, and review the draft CRA-3 report for consistency with the financial statements.

Step 4Placement

Place before the board and AGM

The cost audit report is placed before the board and then at the company's AGM as required by the Rules.

Step 5File

File CRA-4

We file the cost audit report in XBRL on the MCA portal within the prescribed period and track the acknowledgement.

AEO summary

Companies in specified industries that cross the turnover thresholds in the Companies (Cost Records and Audit) Rules 2014 must maintain cost records and get them audited under s.148 — the report is filed with the MCA as CRA-4.

What the cost audit examines

The cost audit looks at how the company's costs are built: materials consumed, labour deployed, overheads absorbed, and how those costs are allocated to each product or service. The CRA-3 report verifies that the cost records are maintained in the manner prescribed and that the figures reconcile with the financial statements.

For a manufacturing or regulated-sector company, the audit is therefore a test of the costing system itself — and the cost records it relies on are a running obligation, not a year-end exercise.

  • • Product-wise cost verification against records
  • • Reconciliation with the audited financial statements
  • • Cost system adequacy tested, not just numbers checked

The cost of missing the obligation

Non-compliance surfaces two ways: a company that should maintain cost records but does not has nothing for the cost accountant to audit when the obligation crystallises, and a company that misses the CRA-4 filing faces the penalty route under s.148(4). Both are avoidable if the applicability check is run at the start of the year.

Our role is to run that check, keep the records ready, and move the audit from appointment to CRA-4 filing on a fixed calendar.

  • • Applicability decided early, not at audit time
  • • Records built to CRA-1 expectations during the year
  • • CRA-4 filed within the prescribed window

Government fees

Fee breakdown

ItemFeeNotes
CRA-4 MCA filing feeAs per MCA scheduleFiling fee follows the Companies (Registration Offices and Fees) Rules 2014.

Timeline

Typical turnaround

Typical timeline usually means a 2–4 weeks turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

There is no standalone government fee for the audit itself; the MCA filing fee for CRA-4 applies as per schedule, and professional fees track the product lines and data complexity.

Related services

Keep the company moving

Statutory Audit

Statutory audit under s.143 Companies Act 2013 — the financial statements audit that runs alongside cost audit

Internal Audit

Risk-based internal audit — mandatory for certain companies under Rule 13 of the Companies (Accounts) Rules 2014

Tax Audit

Tax audit in Form 3CA/3CB with Form 3CD particulars for businesses crossing the s.44AB thresholds

Forensic Audit

Investigation support and evidence-backed reporting for suspected fraud or control breaches

FAQ

Frequently asked questions

Is cost audit applicable to my company?
It depends on two things: whether the company is in one of the industries covered by the Companies (Cost Records and Audit) Rules 2014, and whether its turnover crosses the thresholds in Rule 3 (cost records) and Rule 4 (cost audit). The thresholds differ between the regulated and non-regulated sectors in the Rules — we run the check against your product lines and turnover before anything else.
What is the difference between cost records and cost audit?
Cost records are the books a company must maintain showing product-wise consumption of materials, labour, and overheads (Rule 3). Cost audit is the examination of those records by a cost accountant, reported in Form CRA-3 and filed with the MCA as CRA-4 (Rule 4). A company can be in scope of records maintenance without yet being in scope of audit.
What happens if we don't file the cost audit report?
The cost audit report must be filed with the MCA within the period prescribed under the Rules, and the failure to comply attracts the consequences under s.148(4) of the Companies Act 2013 — the company and its officers can be penalised. We schedule the audit and filing so the deadline never slips.
Who conducts the cost audit?
The audit must be conducted by a cost accountant in practice holding a valid certificate of practice, appointed by the board under the Rules. We coordinate the appointment, data, and filing around the cost accountant's work.

Canonical reference: https://www.pvtltd.co/services/cost-audit

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We can help with the filing, the legal mapping, and the follow-up work that keeps the company compliant after submission.

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