Cost accounting Record Rules are the prescribed details by the Central Government w.r.t utilization of material , labour or other items of cost in respect of a class of companies notified under the provisions of Companies Ac,1956.
The cost accounting record rules are aimed at induced the companies to have control over their operations and cost with a view to achieve optimum utilization of resources in the economy.
These Rules inculcate a system so that such records are maintained under generally accepted cost accounting principles in the systematic way and on uniform basis among the various companies of the industries.This ensure the availability of uniform and authentic database with industries, which can be helpful to the Government in taking appropriate appropriate decision, whenever required.
Cost Accounting Record Rules are applicable only to selected companies incorporated under the Companies Act, 1956 ( whether private or public ) and not to the other forms of business such as partnership,proprietary etc.
Small Scale units are generally exempted from the requirements of cost accounting records rules even if they belong to the industries or class of companies for which , the maintenance of cost accounting have been prescribed.
The Cost Accounting Records Rules merely refers to be maintenance of cost records.It does not mean that there has to be a cost audit also.Cost Audit Order is separately issued after the initial notification of cost accounting records rules.These cost audit orders are issued on the selected companies only.