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CMA Final · Cost and Management Audit · Cost Audit Programme

Ten days after signing his Cost Audit Report for Kaveri Polymers Ltd, the cost auditor learns of a fact that, had it been known earlier, would have led to a change in the cost statements. According to SCA 102 application guidance, what should the cost auditor do regarding documentation?

The cost auditor should add the newly known fact to the cost audit documentation and review the resulting changes in the same way as the original documentation. SCA 102 requires this where the fact would have changed the cost statements or modified the report.

  1. AAdd the fact to the cost audit documentation and review the resulting changes just as the original documentation was reviewedCorrect
  2. BIgnore it, since the report has already been signed and issued
  3. CReplace the original working papers with new ones so that the earlier version is not retained
  4. DRecord it only in the engagement letter for the next year's audit

Explanation

SCA 102 para 6.15 says facts becoming known after the report date, which would have changed the cost statements or modified the report, should be added to the documentation. The resulting changes must be reviewed like the original documentation. Ignoring the fact or replacing papers contradicts this.

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