FUNCTIONS OF A COST AUDITOR

COST AUDIT

“It is the detailed checking of the costing system, technique and

accounts to verify their correctness and to ensure

adherence to the objective of cost accountancy.”

COST AUDIT PROGRAMME

The Cost Auditor should pay his attention to the following records:

• Record of Materials• Labour Records• Record of Overhead Charges• Depreciation• Work-in-Progress Records• Incomplete Records• Stores and Spare Parts Records

FUNCTIONS OF A COST AUDITOR

Inventory

• Is the size of the inventory adequate or excessive compared with he production programme?

• Dose it ensure optimum order size?

Inventory

Labour

• Assess the performance efficiency of the labour and compare it with the standard performance, so that labour utilization could be progressively improved.

• Cost of labour is allocated to different jobs with reference to time or job cards

Capacity utilisation

• The idel capacity in any production shop or of transport facilities for distribution is not excessive.

• The production volume and overall machine hours utilised are commensurate. In other words, the machine hours utilised have given the optimum out turn.

Overheads

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