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

Which of the following is listed in SCA 103 as an inherent limitation that prevents a cost auditor from obtaining absolute assurance?

The possibility of management override or collusion is an inherent limitation named in SCA 103. It falls under the inherent limitations of internal control, alongside sample testing and the persuasive rather than conclusive nature of most audit evidence, so absolute assurance cannot be obtained.

  1. AThe cost auditor's lack of access to the company's website
  2. BThe possibility of management override or collusion affecting internal controlCorrect
  3. CThe requirement to file the report within a fixed period
  4. DThe use of standard costing by the entity

Explanation

SCA 103 lists the use of sample testing, the inherent limitations of internal control (for example management override or collusion), and the fact that most audit evidence is persuasive rather than conclusive. The other options are not listed as such limitations.

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