The applicability of cost audit depends on the turnover of the company as follows-

1. In case of companies classified as “Regulated Sectors” are required to get its cost records audited if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is Rs.50 crore or more and the aggregate turnover of the individual product or service for which cost records are required to be maintained under rule 3 is 25 crore or more.
2. In case of “Non-Regulated Sectors”, they are required to get its cost records audited if the overall annual turnover of the company from all its products and services during the immediately preceding financial year is 100 crore or more and the aggregate turnover of the individual product or service for which cost records are required to be maintained under rule 3 is 35 crore or more.

The audit shall be conducted by a Cost Accountant in Practice who shall be appointed by the Board of such remuneration as may be determined by the members in such manner as may be prescribed.

The qualifications, disqualifications, rights, duties and obligations applicable to auditors under this Chapter X of the Companies Act, 2013 shall, so far as may be applicable, apply to a cost auditor appointed under this section and it shall be the duty of the company to give all assistance and facilities to the cost auditor appointed under this section for auditing the cost records of the company.