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CMA Final · Cost and Management Audit · Cost Audit Programme

Cost auditor of Kaveri Polymers Ltd signed the Cost Audit Report on 10 August. On 25 September he learns of a fact that, had it been known earlier, would have required the cost statements to be changed. As per SCA 102 application guidance, what should he do regarding the audit documentation?

The cost auditor should add the later-discovered fact to the cost audit documentation and review the resulting changes just as the original documentation was reviewed. Ignoring it, skipping review or replacing earlier files is not permitted under SCA 102.

  1. AIgnore it, since the report is already signed and the documentation is closed
  2. BAdd the fact to the cost audit documentation, and review the resulting changes to the documentation in the same way as the original documentationCorrect
  3. CAdd the fact to the documentation without any review, because the review was done earlier
  4. DDestroy the earlier documentation and prepare fresh files dated 25 September

Explanation

SCA 102 para 6.15 says facts becoming known after the report date that would have caused changes to the statements or modification of the report should be added to the documentation, and the resulting changes must be reviewed as the original documentation. Skipping review or ignoring the fact contradicts this.

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