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CMA Final · Cost and Management Audit · Cost Audit Documentation, Audit Process and Execution

Which of the following is among the minimum items that SCA 102 requires in cost audit documentation even for smaller entities, where documentation may be less detailed?

Even for smaller entities, SCA 102 requires at minimum a description of the manufacturing process, preferably as a flow chart, along with items such as the organisation chart, internal controls, assessed risks, materiality tests, the audit plan and significant matters. Directors' tax returns, customer lists and competing quotations are not listed.

  1. AA description of the manufacturing process, preferably a flow chartCorrect
  2. BThe personal tax returns of the directors
  3. CA complete list of all customers with outstanding balances
  4. DQuotations from competing cost auditors

Explanation

The minimum list includes a description of the entity and its products, an organisation chart, a description (preferably a flow chart) of the manufacturing process, internal controls over material cost, labour cost and expenses, risks assessed, materiality tests, audit strategy and plan, and significant matters with conclusions. The other options are not in that list.

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