Written Certificate by the Cost Auditor:-
Section 224(1)(B) provides that no company or its Board of directors shall appoint or re-appoint any
person who is in full time employment elsewhere or firm as its auditor if such person or firm is, at
the date of such appointment or re-appointment, holding appointment as auditor of the specified
number of companies or more than the specified number of companies. The explanation to the said
Section provides that maximum number of companies for which a person can be the auditor at a
point of time cannot be more than twenty.
Proviso to sub-Section (2) of Section 233B further provides that before the appointment of any
auditor is made by the Board, a written certificate shall be obtained by the Board from the auditor
proposed to be so appointed to the effect that the appointment, if made, will be in accordance with
the provisions of sub-Section (1B) of Section 224.
Therefore, Company should obtain a written certificate from the proposed cost auditor to the effect
that the appointment, if made, will be in accordance with the provisions laid down by Section
224 of the Companies Act, 1956. A specimen copy of certificate by the Cost Auditor is given at
Appendix I-B.
Section 224(1)(B) provides that no company or its Board of directors shall appoint or re-appoint any
person who is in full time employment elsewhere or firm as its auditor if such person or firm is, at
the date of such appointment or re-appointment, holding appointment as auditor of the specified
number of companies or more than the specified number of companies. The explanation to the said
Section provides that maximum number of companies for which a person can be the auditor at a
point of time cannot be more than twenty.
Proviso to sub-Section (2) of Section 233B further provides that before the appointment of any
auditor is made by the Board, a written certificate shall be obtained by the Board from the auditor
proposed to be so appointed to the effect that the appointment, if made, will be in accordance with
the provisions of sub-Section (1B) of Section 224.
Therefore, Company should obtain a written certificate from the proposed cost auditor to the effect
that the appointment, if made, will be in accordance with the provisions laid down by Section
224 of the Companies Act, 1956. A specimen copy of certificate by the Cost Auditor is given at
Appendix I-B.
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