Cost Audit (CARR / CRA)
Cost-record and cost-audit support, including preparation and filing assistance for applicable CRA forms.
- Estimate Cost
- ₹50,000 – ₹3,00,000
- Typical duration
- 30 days
Service overview
Support for companies subject to cost-record and cost-audit requirements under the Companies Act framework.
The focus is on making cost information reliable enough to support pricing, budgeting and operating decisions. The approach should fit the company's production or service model.
Who needs it? / When is it needed?
Companies and industries notified as subject to cost-record or cost-audit requirements.
It is most useful when margins are unclear, costs vary unexpectedly, product prices are being reviewed or management needs a consistent basis for comparing jobs and processes.
What to expect from the WCP Professionals
The professional would assess applicability, organise cost records, reconcile relevant data, coordinate with the cost auditor and prepare the filing package.
How the work would proceed:
- The professional would first check whether the company and its products/services fall within the current cost-record or cost-audit requirements
- They would review the prescribed records, coordinate with the cost auditor, reconcile production and financial data and prepare supporting information for the applicable CRA filing
- The statutory audit opinion and certification must come from the appropriately qualified cost auditor, not from administrative filing support alone
Key deliverables
Cost-record checklist, cost-audit data pack, reconciliation and filing support.
The output should state its cost-allocation method and assumptions so the business can repeat the calculation. Any estimate should be distinguished from an audited or statutory cost figure.
Standard turnaround time
4-8 weeks for a full annual cycle, depending on the business and records.
The first exercise may take longer while cost codes, production data and allocation assumptions are agreed. Recurring reports can be prepared faster once the business uses consistent source records.
Government fees, timelines & key outcomes
No government fee for the audit itself; MCA filing fees apply to Forms CRA-2 and CRA-4, with additional fees for late filing.
- Key timelines under the Companies (Cost Records and Audit) Rules, 2014:
- Cost auditor appointed within 180 days of the start of the financial year, and intimated in Form CRA-2 within 30 days of the board meeting or 180 days of the year's start, whichever is earlier
- Cost audit report in Form CRA-3 submitted to the board within 180 days of the year end
- Report filed with the Central Government in Form CRA-4 within 30 days of the company receiving it
Key outcomes: completed cost-audit compliance and a cost audit report filed on time.
Forms & filings involved
- Form CRA-1 — format of cost records to be maintained
- Form CRA-2 — intimation of appointment of the cost auditor
- Form CRA-3 — cost audit report with annexures
- Form CRA-4 — filing of the cost audit report with the Central Government (in XBRL)
Documents required
Cost records, production data, material consumption, inventory, labour and overhead records.
The analysis should be tied to underlying purchases, payroll, inventory and production records. If operational data does not reconcile with the accounts, that limitation should be disclosed in the report.
What we need from you
Complete cost data and access to the finance and operations teams.
Please appoint someone from finance and someone from operations to validate the inputs. Costing assumptions, production volumes and overhead allocations should be confirmed before results are used to set prices.
Important conditions
A statutory cost audit must be carried out and certified by the appropriately qualified cost auditor.
The result is only as reliable as the source data and the chosen costing method. A management costing exercise does not replace a statutory audit or certification by a qualified cost auditor.
Additional information
Not every company is subject to cost audit. Applicability must be determined from the notified industry and thresholds.
The same cost data can feed into budgeting, product pricing, inventory controls and management reporting, provided that definitions remain consistent across reports.
The estimated cost covers indicative professional fees only. Government fees, stamp duty and taxes are payable at actuals.
How it works
- 1. Raise a service enquiry describing your requirement.
- 2. A Relationship Manager reviews it and opens it for bidding.
- 3. Pay into escrow and assign the professional you select.
- 4. Track progress to completion, then accept and release payment.
Frequently asked questions
When is cost audit applicable?
Regulated sectors: overall turnover ₹50 crore and product turnover ₹25 crore or more. Non-regulated sectors: ₹100 crore and ₹35 crore respectively.
What is Form CRA-2?
The intimation of the cost auditor's appointment to the Central Government, filed within 30 days of the board meeting or 180 days of the year's start, whichever is earlier.
When is CRA-4 due?
Within 30 days of the company receiving the cost audit report, filed in XBRL format.
Can the statutory auditor do the cost audit?
No. The cost audit must be done by a practising Cost Accountant, and the statutory auditor cannot be appointed as cost auditor.