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CMA Final · Cost and Management Audit · Cost Audit Programme

On a recurring cost audit engagement, what does SCA 105 require the cost auditor to assess?

On recurring cost audits the cost auditor must assess whether circumstances require the engagement terms to be revised and whether the entity needs a reminder of the existing terms. The standard does not provide for reissuing old reports or waiving terms after the first year.

  1. AWhether the cost auditor should be replaced by rotation
  2. BWhether circumstances require the terms of the engagement to be revised and whether the entity needs to be reminded of the existing termsCorrect
  3. CWhether the previous year's cost audit report may be reissued without examination
  4. DWhether the engagement terms may be waived after the first year

Explanation

SCA 105 para 5.8 states that on recurring audits the cost auditor assesses whether circumstances require revising the terms and whether there is a need to remind the entity of the existing terms. Nothing in it provides for rotation, reissue of reports or waiver of terms.

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