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

Which of the following best describes the scope of SCA 103 as stated in the Standards on Cost Auditing?

SCA 103 sets out the overall objectives of the independent cost auditor when auditing cost statements in accordance with the cost auditing standards. It also describes management's responsibility for preparing and presenting the cost statement, identifying the cost reporting framework and laying down cost accounting policies.

  1. AIt prescribes the format in which the cost audit report is to be filed with the Central Government
  2. BIt fixes the remuneration payable to the cost auditor for audits of cost statements
  3. CIt establishes the overall objectives of the cost auditor while conducting an audit of cost statements in accordance with the cost auditing standardsCorrect
  4. DIt lays down the rules for appointing an internal auditor of the company

Explanation

The scope of SCA 103 is to establish the overall objectives of the cost auditor when auditing cost statements under the cost auditing standards. It also describes management responsibility for preparing the cost statement. Report format, remuneration and internal auditor appointment are not its scope.

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