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CMA Final · Cost and Management Audit · Cost Auditing and Assurance Standards

A cost auditor has complied with most, but not all, Cost Auditing Standards relevant to an audit, and the omitted standard was relevant because its circumstances existed. What does SCA 103 permit regarding the auditor's report?

The auditor must not represent compliance. SCA 103 permits representing compliance with Cost Auditing Standards only when all relevant standards have been fully complied with. A standard is relevant when it is in effect and its circumstances exist, so partial compliance does not allow such a representation.

  1. ARepresenting compliance with the standards, since most were followed
  2. BRepresenting compliance if the omitted standard was immaterial in value
  3. CRepresenting compliance after disclosing the omission in a footnote
  4. DNot representing compliance with the Cost Auditing Standards in the reportCorrect

Explanation

SCA 103 says a standard is relevant when it is in effect and the circumstances it addresses exist, and the auditor must comply with each relevant standard. The auditor shall not represent compliance unless all relevant standards were fully complied with. Partial compliance and footnotes do not qualify.

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