Proposed Changes to Section 148 of the Companies Act, 2013: Cost Standards, Auditor Firms and Officer Penalties

This article describes the changes that clause 48 of the Corporate Laws (Amendment) Bill, 2026 proposes to Section 148 of the Companies Act, 2013, and what they would mean for finance heads, managing directors, whole-time directors in charge of finance and cost auditors.

The measure is a proposal and not yet law. It matters now because it would name the individuals responsible for cost records, and companies that start by closing gaps in their cost data and Board records will be ready when it takes effect.

The present section

Section 148 currently works as follows:

  • Under Section 148(1), the Central Government may direct prescribed classes of companies to include particulars of cost in their books of account, after consulting the regulator under any special Act.
  • Under Section 148(2), it may order a cost audit for such classes where net worth or turnover thresholds are met.
  • Under Section 148(3), the audit is conducted by a Cost Accountant appointed by the Board, on a remuneration determined by the members. The person appointed as auditor under Section 139 cannot be appointed cost auditor, and the cost auditor must follow the cost auditing standards issued by the Institute of Cost Accountants of India with the approval of the Central Government.
  • Under Section 148(4), cost audit is in addition to the audit under Section 143.
  • The report goes to the Board under Section 148(5), and the company furnishes it to the Central Government within thirty days of receipt, with explanations on any reservations, under Section 148(6).
  • Under Section 148(7) the Central Government may call for further information, and under Section 148(8) default attracts the penalties of Section 147.