Do you need cost records or a cost audit?
Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 set two separate tests. Both use turnover of the preceding financial year.
| Requirement | Applies when |
|---|---|
| Maintain cost records (Form CRA-1) | Your product or service is listed in the Rules and overall turnover is ₹35 crore or more |
| Cost audit: regulated sectors (Table A) telecom, electricity, petroleum products, drugs and pharma, fertilisers, sugar and industrial alcohol | Overall turnover ₹50 crore or more, and turnover of the covered product or service ₹25 crore or more |
| Cost audit: non-regulated sectors (Table B) steel, automobiles, chemicals, machinery, electrical and electronic equipment, and others | Overall turnover ₹100 crore or more, and turnover of the covered product or service ₹35 crore or more |
Outside the audit: micro and small enterprises under the MSMED Act, companies whose export earnings in foreign exchange are more than 75% of total revenue, units in a Special Economic Zone, and captive power generation. Some of these still have to keep cost records.
Many manufacturers in Noida's industrial sectors, between ₹35 crore and ₹100 crore turnover, need cost records but have never kept them. That is the most common gap we find.
What we do
- Applicability check: map each product to the headings in the Rules and test both turnover conditions, product by product.
- Cost records: set up CRA-1 records for materials, labour, utilities and overheads, following the Cost Accounting Standards, and reconcile them with your financial books.
- Cost audit: audit of cost records and the cost audit report in Form CRA-3, with the full annexure: capacity utilisation, abridged cost statement, product-wise profitability and reconciliation with financial accounts.
- MCA filings: board and audit committee resolutions, CRA-2 for the appointment, and CRA-4 in XBRL.
- Management review: we take you through what the report shows, which product earns, which loses, and what idle capacity costs you. Read our note on what your cost audit report tells you.
- Cost review below the threshold: product costing and pricing reviews for companies that aren't required to have a cost audit but want the numbers.
The cost audit calendar
| Step | Form | Due |
|---|---|---|
| Appointment of cost auditor by the Board, on the Audit Committee's recommendation | — | Within 180 days of the start of the year |
| Intimation of appointment to MCA | CRA-2 | Within 30 days of the Board meeting, or 180 days from the start of the year, whichever is earlier (27 September for a March year-end) |
| Cost audit report to the Board | CRA-3 | Within 180 days of the year-end (27 September) |
| Filing of the report with MCA, in XBRL | CRA-4 | Within 30 days of receiving the report |
| Ratification of the cost auditor's remuneration by members | — | At the general meeting |
Full details are in our note on cost audit for FY 2025-26 and the CRA-2 and CRA-4 deadlines.
Who can be your cost auditor
- Only a Cost Accountant in practice, or a firm of Cost Accountants, can conduct a cost audit.
- Your statutory auditor cannot also be your cost auditor. The two audits are kept separate by law.
- The same cost auditor can be re-appointed, but CRA-2 has to be filed afresh every year.
How we work
- Free applicability review: send us your product list and last two years' turnover. We tell you whether records, audit, or neither apply.
- Fixed quote based on the number of products, plants and the state of your records.
- Records through the year: monthly or quarterly cost sheets, so the year-end audit is a check, not a rebuild.
- Report and filing: CRA-3 to the Board on time, CRA-4 filed, and a management meeting on the findings.
Guides on cost audit
Short notes from our team on the rules, deadlines and the mistakes we see most often.
Running a manufacturing company in Noida or NCR? Why you need a CMA
Noida and NCR factories often know their sales but not the cost of one unit. Where the law requires a Cost Accountant, the costing error that hides loss-making products, and ten things a CMA does on the factory floor.
Read note →Beyond compliance: what your cost audit report tells you that your balance sheet doesn't
Your statutory auditor tells you whether you made a profit. The cost audit report shows which product made it, how much capacity sits idle, and which line is quietly losing money. With a worked example.
Read note →Cost audit for FY 2025-26: who it applies to, and the CRA-2 and CRA-4 deadlines
Rule 3 and Rule 4 thresholds, who is exempt, the 180-day and 30-day clocks, and the CFO penalty the 2026 Bill proposes.
Read note →Internal audit under Section 138: who needs it, and what it should actually test
The ₹200 crore and ₹100 crore triggers, who can be appointed, how CARO 3(xiv) exposes a token audit, and where to focus.
Read note →AOC-4 and MGT-7: your company's annual filing for FY 2025-26
Dates that run from your AGM, what each form needs, and why ₹100 a day with no cap is the least of the problem.
Read note →Frequently asked questions
Our turnover is ₹60 crore and we make steel products. Do we need a cost audit?
Most likely you need to keep cost records, because turnover is above ₹35 crore. A cost audit for a non-regulated product like steel starts only at ₹100 crore overall turnover and ₹35 crore for the product. We check the exact product headings before confirming.
We are an MSME. Does cost audit apply to us?
Micro and small enterprises under the MSMED Act are outside the Rules. Since April 2025, a small enterprise can have turnover up to ₹100 crore, so check your current Udyam classification. A medium enterprise is not exempt.
We missed CRA-2 or CRA-4. What now?
File it as soon as possible with the additional fee. The fee rises the longer it waits, and the company and its officers can face penalties under the Act. We prepare the pending resolutions and forms and file them together.
Can our statutory auditor do the cost audit as well?
No. The law does not allow the company's statutory auditor to be its cost auditor. You need a separate Cost Accountant in practice.
Do you work with companies outside Noida?
Yes. We are in Sector 63, Noida and work with companies across Greater Noida, Ghaziabad, Delhi NCR and elsewhere in North India. Plant visits are scheduled as the audit needs.
This page is general information, current as of October 2026, and not advice for your specific situation. Laws, forms and due dates change — speak to us before acting on it.