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

A Cost Auditor completes fieldwork on a plant in Pune and, two months later, writes up the working papers from memory. Under SCA 102 application guidance, what is the main concern with this approach?

The concern is accuracy. SCA 102 guidance states that documentation prepared after the audit work has been performed is likely to be less accurate than documentation prepared during execution, so timely preparation enhances audit quality.

  1. ADocumentation prepared after the work is performed is likely to be less accurate than documentation prepared during executionCorrect
  2. BWorking papers may be prepared only after the report is signed
  3. CDocumentation prepared later is always invalid and must be rejected by the Council
  4. DTimely documentation is relevant only to large entities

Explanation

SCA 102 guidance says preparing documentation on a timely basis helps enhance audit quality, and documentation prepared after the work is likely to be less accurate than that prepared during execution. The other options overstate or invent rules.

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