Section 148 — Central Government to sp ecify audit of items of cost in respect of certain companies

(1)
Notwithstanding anything contained in this Chapter, the Central Government may, by order, in respect of
such class of companies engaged in the production of such goods or providing such serv ices as may be
prescribed, direct that particulars relating to the utilisation of material or labour or to other items of cost as
may be prescribed shall also be included in the books of account kept by that class of companies:
Provided that the Central Go vernment shall, before issuing such order in respect of any class of
companies regulated under a special Act, consult the regulatory body constituted or established under such
special Act.
(2) If the Central Government is of the opinion, that it is necessary to do so, it may, by order, direct that
the audit of cost records of class of companies, which are covered under sub-section (1) and which have a
net worth of such amount as may be prescribed or a turnover of such amount as may be prescribed, shall
be conducted in the manner specified in the order.
(3) The audit under sub-section (2) shall be conducted by a 3[cost accountant] who shall be appointed
by the Board on such remuneration as may be determined by the members in such manner as may be
prescribed:
Provided that no person appointed under section 139 as an auditor of the company shall be appointed
for conducting the audit of cost records:
Provided further that the auditor conducting the cost audit shall comply with the cost auditing standards.
Explanation.—For the purposes of this sub-section, the expression “cost auditing standards” mean such
standards as are issued by the 4[Institute of Cost Accountants of India], constituted under the Cost and
Works Accountants Act, 1959 (23 of 1959), with the approval of the Central Government.
(4) An audit conducted under this section shall be in addition to the audit conducted under section 143.
(5) The qualifications, disqualifications, rights, duties and obligations applicable to auditors under this
Chapter shall, so far as may be applicable, apply to a cost auditor appointed under this section and it shall
be the duty of the company to give all assistance and facilities to the cost auditor appointed under this
section for auditing the cost records of the company:
Provided that the report on the audit of cost records shall be submitted by the 5[cost accountant] to the
Board of Directors of the company.

1. Subs. by Act 1 of 2018, s. 44, for “or to any other persons” (w.e.f. 9-2-2018).
2. The proviso ins. by s. 44, ibid., (w.e.f. 9-2-2018).
3. Subs. by s. 45, ibid., for “Cost Accountant in practice”(w.e.f. 9-2-2018).
4. Subs. by s. 45, ibid., for “Institute of Cost and Works Accountants of India” (w.e.f. 9-2-2018).
5. Subs. by s. 45, ibid., for “cost accountant in practice”(w.e.f. 9-2-2018).

(6) A company shall within thirty days from the date of receipt of a copy of the cost audit report prepared
in pursuance of a direction under sub -section (2) furnish the Central Government with such report along
with full information and explanation on every reservation or qualification contained therein.
(7) If, after considering the cost audit report referred to un der this section and the information and
explanation furnished by the company under sub-section (6), the Central Government is of the opinion that
any further information or explanation is necessary, it may call for such further information and explanation
and the company shall furnish the same within such time as may be specified by that Government.
(8) If any default is made in complying with the provisions of this section,—
(a) the company and every officer of the company who is in default shall be punis hable in the
manner as provided in sub-section (1) of section 147;
(b) the cost auditor of the company who is in default shall be punishable in the manner as provided
in sub-sections (2) to (4) of section 147.