Cost and Management Audit · Cost Audit Documentation, Audit Process and Execution

Ownership, Custody and Retention of Cost Audit Files

Updated 11 October 2026 · Fact-checked

Under SCA 102, the cost auditor assembles audit documentation into an audit file, completes assembly within a reasonable time after the audit, and must not delete or discard any documentation before its retention period ends. Later changes are allowed only in exceptional cases and must be documented and reviewed.

Understand Ownership, Confidentiality, Custody and Retention of Audit Files

Audit documentation is the record of your work. SCA 102 para 4.2 defines it as records, in physical or electronic form, including working papers prepared by and for, or obtained and retained by the cost auditor, in connection with the audit. Para 4.6 adds that audit working papers record all audit evidence obtained and support the assurance that the audit followed the Cost Auditing Standards.

The papers are gathered in an audit file. Para 4.3 defines it as one or more folders or other storage media, physical or electronic, holding the records that make up the documentation for a specific assignment. One assignment, one file.

The file is built as you go. Para 6.16 says documentation must be assembled as the audit goes on, so the final assembly is limited. Final assembly must be completed within a reasonable time after the audit is completed. Once assembly is complete, you must not delete or discard documentation of any nature before the end of its retention period (para 6.16, referring to para 5.9).

After the report date, the file may need to change. Para 5.7 covers new or additional procedures or new conclusions after the date of the Cost Audit Report, in exceptional circumstances. Para 6.15 covers facts that become known after the report date which, if known earlier, would have changed the cost statements or modified the report. Both must be added to the documentation, and the changes reviewed like the original.

The text supplied to you does not state a specific number of years for retention, nor does it set out ownership or confidentiality in words. Treat those as general professional principles: the working papers belong to the auditor, the contents are confidential, and the file must be kept safely. Do not quote a number of years or a paragraph number for them unless the question gives it.

Key rules to remember

Timely preparation (para 5.6): Prepare audit documentation on a timely basis; Para 6.14: documentation prepared after the work is likely to be less accurate than documentation prepared during execution.
Assembly of the file (para 5.8): Audit documentation → assembled in one audit file; Assembly is done as the audit goes on; the final assembly is completed within a reasonable time after the audit (para 6.16).
No deletion (para 6.16): After final assembly: no deleting or discarding before the end of the retention period; Applies to documentation of any nature. Refers to para 5.9.
Post-report changes (paras 5.7, 6.15): New procedures, new conclusions or later-known facts → document the circumstances and details, and review the changes like the original; Para 5.7 applies in exceptional circumstances after the report date.
Sufficiency (para 6.5): Oral explanations ≠ substitute for documentation; Documentation must be sufficient and appropriate.
Effective date (para 7): SCA 102 applies to audits on or after 11 September 2015; Date as in the standard.

How to solve Ownership, Confidentiality, Custody and Retention of Audit Files questions

Use this order for any question on file assembly, custody, retention or later changes.

1Identify the stage: during the audit, final assembly, or after the report date.
2Name the rule: timely preparation (5.6, 6.14), assembly (5.8, 6.16), or post-report changes (5.7, 6.15).
3Apply it to the facts. Check the timing, the type of change and who did what.
4For a change after the report date, say it must be documented with the circumstances and procedures, and reviewed like the original.
5For deletion or discarding, say it is not allowed after assembly until the retention period ends.
6For ownership, confidentiality and custody, state the principle in plain words without inventing a paragraph number or a number of years.
7Close with a clear conclusion: compliant or not, and the action needed.

Quickest way: Three-stage check

When to use it: For MCQs and short case questions on the audit file.

Before the report: was it prepared on time and assembled as you go?
At final assembly: completed within a reasonable time?
After assembly or report: no deletion; any addition documented and reviewed.
Pick the option matching the stage. Reject options that allow oral explanation as a substitute or that fix an exact number of years not given.

Common mistakes in Ownership, Confidentiality, Custody and Retention of Audit Files

Stating a fixed number of years for retention as if it were in SCA 102 paras 6.14 to 6.16.
Students memorise a figure from another source.
Fix: Say the file is kept until the end of its retention period, and avoid a number unless the question gives it.
Thinking the auditor may tidy the file by removing superseded papers after assembly.
Students treat tidying as harmless.
Fix: Para 6.16 bars deleting or discarding documentation of any nature before the retention period ends.
Treating facts that surface after the report date as outside the file.
Students think the file closes on the report date.
Fix: Under para 6.15 such facts are added, and the changes are reviewed like the original.
Accepting oral explanations as support.
Students assume the auditor's word is enough.
Fix: Para 6.5: oral explanations cannot substitute for documentation.
Writing up the file at the end of the audit.
It looks efficient.
Fix: Para 6.14: late documentation is likely to be less accurate. Prepare it during execution.

Worked examples

Example 1

A cost auditor signed the Cost Audit Report on 30 August. In October, while reviewing a vendor ledger, she finds a fact that, if known earlier, would have changed the cost statements. Her final file is already assembled. What should she do with the file?

Show the solution

The fact became known after the report date and would have changed the cost statements or modified the report.
Para 6.15 says such facts should be added to the Cost Audit Documentation.
Under para 5.7, any new or additional procedures or new conclusions must be documented with the circumstances and details.
Para 6.15 requires the resulting changes to be reviewed as the original documentation was.

Answer: She must add the fact, the circumstances and the procedures performed to the audit file, and have the changes reviewed like the original documentation. She must not delete earlier papers.

Example 2

After completing a cost audit, the auditor's team discards some rough working papers before final assembly of the file is complete, saying they are duplicates. Later the file is assembled. Comment on the position of the auditor when a junior then proposes discarding more superseded papers to save space.

Show the solution

Papers should be assembled as the audit goes on, so final assembly is limited (para 6.16).
After final assembly, the auditor should not delete or discard documentation of any nature before the retention period ends (para 6.16).
Superseded papers still form part of the documentation, which includes all working papers and records obtained and retained (para 4.2).
So the proposal to discard more papers after assembly is not allowed.

Answer: The proposal should be rejected. After final assembly, no documentation of any nature may be deleted or discarded before its retention period ends. Any earlier discards should be examined against the rule that documentation is assembled as the audit goes on.

Exam tips

Quote para numbers only for the ones in SCA 102: 5.6, 5.7, 5.8, 6.5, 6.14, 6.15 and 6.16.
Link each answer to a stage: during, at assembly, or after the report date.
Use the phrase 'documented and reviewed like the original' for post-report changes.
For ownership and confidentiality, give the principle in plain words and do not invent a section number.
In MCQs, reject options that allow deletion after assembly or oral explanation as a substitute.

Practice questions from Cost Audit Documentation, Audit Process and Execution

Ownership, Confidentiality, Custody and Retention of Audit Files: frequently asked questions

Can a cost auditor delete papers after the file is assembled?

No. Para 6.16 says that after final assembly the auditor should not delete or discard documentation of any nature before the end of its retention period.

What do paras 6.14 and 6.15 of SCA 102 say?

Para 6.14 says documentation should be prepared on time, as late documentation is likely to be less accurate. Para 6.15 says facts known after the report date, which would have changed the statements or the report, must be added to the documentation and the changes reviewed like the original.

How long must the audit file be kept?

The text supplied only says documentation must be kept until the end of its retention period. It gives no number of years, so refer to the retention period rather than a figure in your answer.

When is the final audit file assembled?

Papers are assembled as the audit goes on. The final assembly must be completed within a reasonable time after the audit is completed (para 6.16).