Cost and Management Audit · Cost Audit Programme

SCA 102 Cost Audit Documentation Explained

Updated 11 October 2026 · Fact-checked

Cost audit documentation under SCA 102 means the records, on paper or electronic, including working papers, that the cost auditor prepares or obtains and retains for the audit. It supports the audit work and shows the audit followed the Standards. Keep it for at least ten years from the date of the Cost Audit Report.

Understand Cost Audit Documentation (SCA 102)

Think of audit documentation as your proof. The cost auditor signs a report. If anyone questions it later, the file must show what you did, what evidence you got and why you reached your conclusion.

SCA 102 defines audit documentation as the 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 performance of the audit. Audit working papers are the documents that record all audit evidence obtained during the audit. They support the work done, to give assurance that the audit was performed in accordance with the relevant Cost Auditing Standards.

The content and form are not fixed. They depend on the size and complexity of the auditee's operations, the extent of computerisation of cost records, the assessed risks of material misstatement of cost, the cost audit methodology and tools used (for example, automated queries to get evidence from cost records), and the nature of the audit procedure. A small single-product unit needs a lighter file than a multi-plant company with an ERP system.

Documentation may be on paper or electronic. If electronic, special care may be needed to protect against accidental deletion or tampering. It must be sufficient and appropriate. Oral explanations by the cost auditor cannot substitute for it.

The file belongs to the cost auditor. It is built as the audit goes on, assembled into a final file within a reasonable time after the audit, and then kept untouched through the retention period.

Key rules to remember

Audit documentation (para 4.2): Records (physical or electronic) + working papers, prepared by and for, or obtained and retained by, the cost auditor in connection with the audit; Wider than working papers alone. It includes items obtained from the auditee and retained.
Audit working papers (para 4.6): Documents recording all audit evidence obtained, used to support the audit work and give assurance that the audit followed the Cost Auditing Standards; Learn the purpose: support the work and show compliance with the Standards.
Factors affecting content and form (para 6.3): (a) size and complexity of auditee; (b) extent of computerisation of cost records; (c) assessed risks of material misstatement of cost; (d) methodology and tools used; (e) nature of audit procedure; Five factors. Examiners often ask you to list them.
Sufficiency (para 6.5): Documentation must be sufficient and appropriate; oral explanations cannot substitute; If it is not in the file, it is treated as not done.
Team member details (para 6.13): Preparer's name + details of the cost auditor's review = necessary part of documentation; Shows who did the work and who reviewed it.
Timeliness (para 6.14): Prepare documentation on a timely basis, during the work; Documentation prepared after the work is likely to be less accurate.
Facts after report date (para 6.15): Facts known after the report date that would have changed the cost statements or modified the report must be added to the documentation, and the changes reviewed like the original; Added, not substituted for earlier papers.
Final file assembly (para 6.16): Assemble within a reasonable time after audit completion; afterwards do not delete or discard any documentation before the end of the retention period; Final assembly should be limited to administrative work, since documents are assembled as the audit goes on.
Ownership (para 6.17): Documentation is the property of the cost auditor; unless law or regulation says otherwise, he may at his discretion make portions or extracts available to clients; The client has no automatic right to the file.
Retention (para 6.18): Retain for at least 10 years from the date of the Cost Audit Report; The period runs from the report date, not from the year-end or filing date.

How to solve Cost Audit Documentation (SCA 102) questions

Most questions on SCA 102 are either a definition or purpose question, or a short case where you must say what the auditor should do with the file. Use this method.

1Identify what is asked: meaning, contents, ownership, timing, later facts or retention.
2Quote the definition or rule in the Standard's own idea, using terms like audit documentation, working papers, audit evidence.
3Name the relevant para or factor if you are sure, such as 6.18 for retention or 6.15 for facts after the report date.
4Apply it to the facts in the case: size, computerisation, risk, who prepared and reviewed, dates.
5State the action required, such as add the new facts, review the changes, retain for ten years, or do not delete.
6Close with a clear one-line conclusion, so the examiner sees a decision and not just theory.

Quickest way: Para-to-rule recall grid

When to use it: Use it for MCQs and short notes when you have under two minutes per question.

Link each number to one idea: 6.2 form, 6.3 factors, 6.5 sufficiency, 6.13 names, 6.14 timing, 6.15 later facts, 6.16 final file, 6.17 ownership, 6.18 retention.
Spot the keyword in the question: oral means 6.5; electronic means 6.2; ten years means 6.18; after report date means 6.15.
Eliminate options that make the client the owner, allow deletion after assembly, or accept oral explanation as enough.
Pick the option matching the Standard's wording and move on.

Common mistakes in Cost Audit Documentation (SCA 102)

Saying the client owns the cost audit file.
Students think the client paid for the audit, so the papers are theirs.
Fix: Remember para 6.17: the documentation is the cost auditor's property. He may, at his discretion and unless law says otherwise, share portions or extracts.
Counting the ten-year retention from the end of the financial year or the filing date.
Students mix it up with other record-retention rules.
Fix: Para 6.18 says at least ten years from the date of the Cost Audit Report.
Replacing or discarding earlier papers when new facts arrive after the report date.
It feels natural to correct the file.
Fix: Under para 6.15 the new facts are added, and the resulting changes are reviewed as the original documentation was. Para 6.16 bars deletion within the retention period.
Treating oral explanations as adequate evidence of work done.
In practice, discussions with the team seem enough.
Fix: Para 6.5 says documentation must be sufficient and appropriate and oral explanations cannot substitute.
Giving one fixed list of contents for every audit file.
Students memorise a checklist and ignore the factors.
Fix: Say content and form depend on the five factors in para 6.3, then give examples suited to the auditee.
Preparing working papers at the end of the audit to save time.
Fieldwork pressure makes documentation seem a closing task.
Fix: Para 6.14 says timely preparation improves quality; later documentation is likely to be less accurate. Final assembly should be limited to administrative work.

Worked examples

Example 1

A cost auditor signed the Cost Audit Report of Sharma Steels Ltd on 20 August 2027. On 5 October 2027 he learns of a purchase-price adjustment, unknown earlier, which would have changed the cost statements. His assistant suggests replacing the original material cost working paper with a corrected one. Advise him and state the minimum retention period and its end date.

Show the solution

Facts known after the report date that would have changed the cost statements or modified the report must be added to the documentation (para 6.15).
The resulting changes must be reviewed in the same way as the original documentation.
After the final audit file is assembled, no documentation of any nature may be deleted or discarded before the retention period ends (para 6.16). So the original paper must not be replaced.
Retention is at least ten years from the date of the Cost Audit Report (para 6.18).
Ten years from 20 August 2027 ends on 20 August 2037.

Answer: Do not replace the original paper. Add the new facts and the corrected working, get the changes reviewed like the original, and keep the whole file for at least ten years, that is, up to at least 20 August 2037.

Example 2

Mehta & Co., cost auditors, audit two clients: a small single-plant unit with manual cost records, and a large multi-plant company with ERP-based cost records. Explain why the documentation will differ, and whether Mehta & Co. may refuse to hand over its full file to the small unit on request.

Show the solution

Content and form depend on factors in para 6.3: size and complexity of operations, extent of computerisation, assessed risks of material misstatement of cost, methodology and tools, and the nature of procedures.
The large company has greater size and complexity and computerised records. Automated queries to obtain evidence may be used, so the file will include query records and system-based evidence.
The small unit has manual records and simpler operations, so the file will be lighter, but still sufficient and appropriate (para 6.5).
On ownership, para 6.17 says the documentation is the cost auditor's property.
Unless law or regulation specifies otherwise, he may at his discretion make portions or extracts available to clients.

Answer: The files differ because the para 6.3 factors differ, though both must be sufficient and appropriate. Mehta & Co. owns the file and, unless law or regulation requires otherwise, may give only portions or extracts at its discretion; it need not hand over the full file.

Exam tips

Learn para numbers 6.3, 6.5, 6.15, 6.17 and 6.18 first; they are the commonly tested ones and the easiest to confuse.
In MCQs, watch for traps: client ownership, oral explanation as sufficient, deletion after assembly, or retention counted from the wrong date.
In case questions, always state the action (add, review, retain) and the period, not only the rule.
For a 'discuss' or short-note question, give definition, purpose, factors, timing, ownership and retention in that order.
Write names of preparer and reviewer in any model file you describe, as para 6.13 makes them a necessary part.

Practice questions from Cost Audit Programme

Cost Audit Documentation (SCA 102): frequently asked questions

What is the difference between audit documentation and audit working papers in SCA 102?

Audit documentation is the wider term: records, physical or electronic, including working papers, prepared by and for, or obtained and retained by the cost auditor. Working papers are the documents that record all audit evidence obtained and support the work done.

How long must cost audit documentation be retained?

At least ten years from the date of the Cost Audit Report, as para 6.18 of SCA 102 provides. After the final file is assembled, nothing may be deleted or discarded before the retention period ends.

What should the cost auditor do if new facts surface after the Cost Audit Report?

If the facts would have caused the cost statements to change or the report to be modified had they been known earlier, they must be added to the documentation. The changes must be reviewed like the original documentation, as para 6.15 states.

Who owns the cost audit file and can the client see it?

The documentation is the property of the cost auditor. Unless law or regulation says otherwise, he may at his discretion make portions of, or extracts from, it available to clients.