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

In SCA 103 as reproduced, what does the 'Overall Audit Strategy' do?

The Overall Audit Strategy sets the scope, timing and direction of the cost audit and guides the development of the detailed audit plan. It is a planning tool, not a fee arrangement, an audit opinion or a list of records to be maintained.

  1. AIt sets the scope, timing and direction of the audit and guides development of the detailed audit planCorrect
  2. BIt fixes the cost auditor's fees for the year
  3. CIt records the final opinion on the cost statements
  4. DIt lists the cost records to be maintained by management

Explanation

The definition states that the Overall Audit Strategy sets the scope, timing and direction of the audit and guides development of the detailed audit plan. It is a planning concept, so it does not fix fees, record the opinion or prescribe the records.

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