Provided that if the Central Government is of opinion that sufficient number of Cost Accountants within the meaning of the Cost and Works Accountants Act, 1959, are not available for conducting the audit of Cost Accounts of companies generally, that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the said notification, such Chartered.
Accountant within the meaning of the Chartered Accountants Act, 1949, as possesses the specified qualifications, may also conduct the audit of the Cost Accounts of Companies and thereupon a Chartered Accountant possessing the prescribed qualifications may be appointed to audit the Cost Accounts of the company.
An auditor under this section shall be appointed by the Board of Directors of the company in accordance with the provisions of sub-section (IB) of section 224 and with the previous approval of the Central Government. [Sec. 233 (B) (1)]
Provided that before the appointment of any auditor is made by the Board, a written certificate shall be obtained by the Board from the auditor proposed to be so appointed to the effect that the appointment, if made, will be in accordance with the provisions of sub-section (IB) of section 224.
A firm of Cost Accountants can also be appointed as Cost Auditors now if all the partners of the firm are practicing as cost accountants and such a firm is constituted with the previous approval of the Central Government as required under Regulations of the Cost and Works Accountants Act, 1959. The cost audit report shall be signed in such a case by any one of the partners for on behalf of the firm.
Powers and Duties:
An auditor shall have the same powers and duties in relation to an audit conducted by him under this section as an auditor of a company has under Sub-Sec. (1) of Sec. 227 and such auditor shall make his report in triplicate to the Central Government in such form and within such time as may be prescribed and shall also at the same time forward a copy of the report to the company.