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CMA Final · Cost and Management Audit · Basics of Cost Audit

According to SCA 103 as reproduced, which statement best describes the scope of the standard on overall objectives of the independent cost auditor?

SCA 103's scope is to set the overall objectives of the cost auditor when auditing cost statements under the cost auditing standards. It also describes management's responsibility for preparing and presenting the cost statement, identifying the cost reporting framework and laying down cost accounting policies.

  1. AIt prescribes the rates of remuneration payable to a cost auditor
  2. BIt establishes the overall objectives of the cost auditor while auditing cost statements in accordance with the cost auditing standards, and describes management's responsibility for preparing the cost statementCorrect
  3. CIt lists the companies that must get cost records audited
  4. DIt deals only with filing the cost audit report with the Central Government

Explanation

The scope paragraph says the standard establishes the overall objectives of the cost auditor when auditing cost statements under the cost auditing standards, and also describes management's responsibility for preparing and presenting the cost statement, identifying the reporting framework and laying down cost accounting policies. Remuneration, applicability and filing are not its scope.

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