Classification of Cost Audit Working Papers

This article throws light upon the three main classification of cost audit working papers. The classifications are: 1. Under the Category of Permanent Records 2. Under the Category of Main Working Papers 3. Under the Category of Supporting Working Papers.

Cost Audit Working Papers: Classification # 1.

Under the Category of Permanent Records:

The following may include:

1. Cost Statements (prescribed under Cost Accounting Records Rules relevant to the ‘product’).

2. Statement of Sales.

3. Statement of Production.

4. Statement of fresh investments on Fixed Assets (which have not contributed to the production).

5. Copies of Profit and Loss Account and Balance Sheet (audited by the Financial Auditor).

6. Copy of the statement of Reconciliation between Cost Accounts and Financial Accounts.

7. Main Cost Audit Report including the Annexure and Proforma.

Cost Audit Working Papers: Classification # 2.

Under the Category of Main Working Papers:

The following may include:

1. Statistical data (extract of information relating to the ‘product’ and others).

2. Working schedules (prepared by the client’s staff and which have direct bearing to the preparation of the Cost Audit Report with its Annexure and Proforma).

3. Client’s letters and Memos containing comments and explanations received (when the data are reviewed with the staff and/or officers of the client’s company).

Cost Audit Working Papers: Classification # 3.

Under the Category of Supporting Working Papers:

The detailed statements and workings of the more junior staff which were necessary to prepare the ‘main working papers’. These are kept and maintained for future reference purposes, if any information in the ‘main working papers’ is needed to be amplified and clarified.

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