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CMA Final · Cost and Management Audit · Cost Auditing and Assurance Standards

Under SCA 103, what level of assurance does a cost auditor obtain about whether the Cost Statements taken as a whole are free from material misstatement?

The cost auditor obtains reasonable assurance. SCA 103 says the objective is reasonable assurance that the Cost Statements as a whole are free from material misstatement due to fraud or error. Absolute assurance cannot be obtained because of sampling, internal control limitations and persuasive rather than conclusive evidence.

  1. AAbsolute assurance
  2. BReasonable assuranceCorrect
  3. CLimited assurance
  4. DNegative assurance only

Explanation

SCA 103 states the objective is to obtain reasonable assurance that the Cost Statements as a whole are free from material misstatement, whether due to fraud or error. Absolute assurance is not attainable because of inherent limitations such as sample testing and limits of internal control.

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