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

According to the Standards on Cost Auditing, what does the 'Overall Audit Strategy' do?

The Overall Audit Strategy sets the scope, timing and direction of the audit and guides the development of the detailed audit plan. It is a planning concept in SCA 103, not about remuneration, record keeping or management's responsibility for the cost statement.

  1. AIt fixes the remuneration payable to the cost auditor
  2. BIt lists the cost records the company must maintain
  3. CIt sets the scope, timing and direction of the audit and guides development of the detailed audit planCorrect
  4. DIt states management's responsibility for the cost statement

Explanation

SCA 103 defines Overall Audit Strategy as setting the scope, timing and direction of the audit, and guiding the development of the detailed audit plan. The other options describe remuneration, record maintenance or management responsibility, which are not this definition.

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