Cost audit and its Objects

In simple words the term cost audit means a systematic and accurate verification of the cost accounts and records and checking of adherence to the objectives of the cost accounting.

As per ICWA London “cost audit is the verification of the correctness of cost accounts and of the adherence to the cost accounting plan.”

In cost audit auditor has to perform the following duties:

  1. Examine the correctness of the cost records maintained by the concern and
  2. To report as to whether the cost accounting plans have been adhered to or not.

Cost audit is done to keep the cost per unit to the minimum.

Object of cost audit (Following are the basic object of cost audit)

  1. To verify the correctness of the cost accounting records.
  2. To find out whether the principles of cost accountancy have been fully and correctly applied in maintaining cost records.
  3. To search for the deficiencies in the cost record system of the company.
  4. To attain efficiency in cost accounting systems and procedures.

Author: Vikash

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