Explanation:

Only a cost accountant as defined under section 2(28) of the Companies Act, 2013 can be appointed as cost auditor. Cost accountant means who holds a valid certificate of practice under Section 6(1) of Cost and Works Accountant Act, 1959 and is in whole time practice. Cost accountant includes firm of cost accountants and LLP of cost accountants. However, following are the disqualifications of cost auditor:

1. A body corporate
2. An officer or employee of the company
3. Person who is a partner or who is in employment of the officer/employee of company
4. Person who is indebted to the company for an amount exceeding Rs. 5,00,000/-