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

Which of the following is NOT among the minimum items that SCA 102 requires the cost audit documentation of a smaller entity to include?

Shareholders' personal tax returns are not required. SCA 102 lists minimum documentation for smaller entities, including the entity description, organization chart, process flow chart, internal controls over cost elements, risks assessed, materiality tests, audit strategy and plan, and significant matters with conclusions.

  1. AInternal controls over material cost, labour cost and expenses
  2. BTests of materiality used
  3. CA description, preferably a flow chart, of the manufacturing process
  4. DThe detailed personal tax returns of each shareholder of the entityCorrect

Explanation

The minimum list for smaller entities includes an entity description, an organization chart, a process description or flow chart, internal controls over material cost, labour cost and expenses, assessed risks, materiality tests, audit strategy and plan, and significant matters with conclusions. Shareholders' personal tax returns are not listed.

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