Corporate social responsibility and Role of Cost accounting record rules and cost audit report rules.

12 May 2007 |

AIMS of CSR:

• Control Risk Management.
• Improve stakeholder relations & operational impacts.
• Comply Integrated EMS, Social and Productivity Management system.
• Compliance through supply-chain .
• Work out the relationships between business drivers and CSR dimensions.
• Improve strengths and weaknesses of organizational expertise.
• Estimate costs of improving CSR.
• Priorities your initiatives in the light of these factors.
• Publicize your intentions in mission and/or value statements.
• Adopt a Ethical Code.

AIMS of COST Audit:(rule 2 c rule 4 G.S.R. 924(E).-sub-section (4) of section 233B,read with subsection
(1) of section 227 and clause (b) of sub-section (1) of section 642, of the Companies Act, 1956 (1 of 1956),

Based on my/our examination of the records of the company subject to aforesaid qualifications, if any,
I/We give my/our observations and suggestions on the following

(a) the adequacy or otherwise of the cost accounting system including inventory valuation in vogue in the company and suggestions for the improvement thereof. The Cost auditor shall also indicate the persistent deficiencies in the system, pointed out in earlier reports but not rectified;


(b) the adequacy or otherwise of the budgetary control system, if any, in vogue in the company;


(c) matters which appear to him to be clearly wrong in principle or apparently unjustifiable;


(d) cases, where price charged for related party transactions as defined in the respective Cost Accounting
Records Rules is different from normal price, impact of such lower/higher price on margin of the product under reference shall be specified;


(e) areas where the company is incurring losses or where there is considerable decline in profitability, the cost auditor should comment on the reasons thereof including indicative break-even point. The cost auditor shall also comment on the default, if any on the payments due to the Government, financial institutions and
banks, penal interest levied thereon and its impact on the cost of sales and profitability;


(f) steps required to strengthen the company under the competitive environment especially with regard to need for protection from cheaper imports, if any;


(g) export commitments of the company vis-à-vis actual exports for the year under review.

Also comment on
comparative profitability and pricing policy of the company for domestic and export sales. Give impact of exports benefits/ incentives offered by the Government on export profitability;


(h) the scope and performance of internal audit of cost records, if any, and comment on its adequacy or otherwise.


4. The Cost Auditor shall suggest measures for making further improvements in the performance in respect of cost control and cost reduction.

Blog Contributed by RV

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