Cost Audit Report

General Considerations
A cost audit is the application of cost accounting on actual business set-up. It
is a formal report regarding the cost operations of a BEV112 (EVSA2) unit.
Cost Audit represents the verification of cost accounts and check on the
adherence to cost accounting plan. Cost Audit ascertains the accuracy of cost
accounting records to ensure that they are in conformity with Cost Accounting
principles, plans, procedures and objective. Cost Audit comprises following:
1. Verification of the cost accounting records such as the accuracy of the
cost accounts, cost reports, cost statements, cost data and costing
technique and
2. Examination of these records to ensure that they adhere to the cost
accounting principles, plans, procedures and objective.
The objectives of the cost audit:
1. Prospective Objective: Under which cost audit aims to identify the undue
wastage or losses and ensure that costing system determines the correct
and realistic cost of production.
1. Constructive Objectives: Cost audit provides useful information to the
management regarding regulating production, economical method of
operation, reducing cost of operation and reformulating Cost
accounting plans.
Cost Audit Procedures
Cost audit comprises following three steps:
1. Review
2. Verification
3. Reporting
Mechanics
The cost audit group must submit the following on the day set by the adviser.
1) Submit a Cost Auditors Report (8 x 11 bond paper, bookman old style,
font 12, 1 inch margins). see sample report

2) Include monthly cost of production reports from the start up to the last day
of EV operations.