Guidelines for Mandatory Communication to Preceding Cost Auditor by The Institute of Cost Accountants of India
The Institute of Cost Accountants of India, in its Council Meeting dated 30th March 2023, has re-emphasized the necessity for mandatory communication between succeeding cost accountants and their predecessors. The decision was made in accordance with the Notification No. G/128/10/2022(3) dated 25th October, 2022, which had previously addressed this issue.
The Council clarified that if a Cost Accountant accepts a role previously held by another practicing Cost Accountant, they are obligated to engage in a specific format of communication with their predecessor. This stipulation has been put in place to uphold transparency, continuity, and adherence to professional standards.
The communication must include details regarding the potential appointment, its related audit fees, and a request for feedback from the previous cost auditor. A violation of this directive will be seen as an infraction under Clause (8) Part I Schedule I of the Cost and Works Accountants Act,1959.
The directive stresses on the fact that such communication must be sent via Registered/Speed Post. This ensures an undeniable proof of communication, thereby further maintaining the transparency and professional integrity of the process.
This renewed emphasis on the mandate by The Institute of Cost Accountants of India signifies the importance of proper communication and ethical practice among cost accountants. It’s a clear call to all practicing cost accountants to ensure that they adhere to these regulations to maintain the credibility and integrity of their profession.
The Institute of Cost Accountants of India
Ref:G/128/05/2023 Dated: 26th May, 2023
Notification
Subject: Mandatory communication to the previous cost Auditor
ln the view of the decision taken in the 343rd Meeting of Council of the Institute held on 30th March, 2023, in furtherance to the Notification No. G/128/10/2022(3) dated 25th October, 2022, the Council reiterated that the communication is mandatory on the part of every cost accountant, in case he accepts a position as a Cost Accountant previously held by another Cost Accountant in Practice as per the following prescribed format.
In case of any violation thereof will be considered as a violation under Clause (8) Part I Schedule I of the Cost and Works Accountants Act,1959.
Format of Communication to the Previous Cost Auditor
Date
To,
Dear Sir,
I/We have been approached by M/S (name of the Company) to conduct the cost audit relating to its product(s) covered under Cost Audit of the Company/unit(s) located at ————— for the year ending on ————- I/We understand that you were the cost auditor of the Company immediately prior to this offer. Accordingly, I/We hereby communicate to you before I/We accept the said appointment. May I/We request you to provide your feedback on this matter. This communication is being addressed to you in view of the provisions of clause (8) of Part I of the First Schedule to The Cost and Works Accountants Act,1959.
I/We also hereby confirm that, based on the information provided by the Company, the audit fees that will be received by me/us for this assignment will not be lower than the fees received by you for the conduct of cost audit.
Thanking You,
Yours faithfully,
For M/s
Cost Accountant
M.NO.
Note: The communication must be addressed by Registered/ Speed Post.
CMA Kaushik Banerjee
Secretary
