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TMI BlogCost Audit and Assurance Standard on Cost Audit DocumentationX X X X Extracts X X X X X X X X Extracts X X X X ..... formation. 2. Objective The objective of this Standard is to guide the members to prepare documentation that provides: (a) A sufficient and appropriate record of the basis for the Cost Auditor's Report; and (b) Evidence that the audit was planned and performed in accordance with CAASs and applicable legal regulatory requirements. 3. Scope This Standard deals with the cost auditor's responsibility to prepare audit documentation for the audit of cost statements and other cost related information. The specific documentation requirements of other CAAS's do not limit the application of this CAAS. Laws or regulations may establish additional documentation requirements. 4. Definitions The following ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate of practice under subsection (1) of section 6 and who is deemed to be in practice under subsection (2) of section 2 of that Act and includes a firm of cost accountants. 4.6 Assignment or audit Partner: Assignment or audit partner means the partner or other person in the firm who is a member of the Institute of Cost Accountants of India and is in full time practice and is responsible for the Assignment or audit and its performance, and for the report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body. 4.7 Assignment or audit Team: Assignment or audit team means all personnel performing an Assignment or audit, including any experts contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussions with client personnel and outsiders. 5.7 The Cost Auditor shall record any audit procedures performed in exceptional circumstances after the Cost Audit Report or new conclusions reached after that date. 6. Application Guidance 1. The Cost Audit documentation will usually contain Checklists Example: Checklist of compliance with industry specific Record Rules, Checklist of compliance with Measurement Principles in CAS, Checklist of Disclosure requirements as per CAS Audit programs Example: Audit Program for Material Cost, Employee Cost and others Analysis Cost Audit relies more on analytical review than on substantive testing to establish true and fair view. Example: Calorific value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a of the industry. 5. Audit documentation must be sufficient and oral explanations by the Cost Auditor cannot substitute for such documentation. 6. Audit documentation must contain evidence of conformance to requirements of Cost Audit and Assurance Standards in respect of this Standard and other standards. Typical of such evidence are: an adequately documented audit plan the signed appointment letter from the client containing in particular the terms of coverage for the Performance appraisal in a cost audit Minutes of discussion with client personnel with names of members of audit team present particularly of the audit partner when he is present Minutes of team discussions with names of members of audit team presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor significant difficulty in applying necessary audit procedures are also significant, as for example heaps of bulk material in irregular shapes which make volumetric measurement of stock in a physical stock taking unreliable. 10. It is necessary in a Cost Audit to identify the specific matters or items tested. In connection with a Cost Audit these may include Purchase Orders for supply of key raw materials, Goods Receipt Notes for materials, Issue notes for materials, bills of contractors for supply of contract labour among others. Where the Cost Auditor resorts to test checking, the basis used for selection, for example issues of spares above a certain value, and the documents selected. 11. Names of the team member preparing speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be changed or the Cost Audit Report to be modified should be added to the Cost Audit Documentation. The resulting changes to the audit documentation must also be reviewed as the original documentation. 16. The audit documentation is the property of the Cost Auditor. Unless otherwise specified by law or regulation, he may at his discretion, make portions of, or extracts from audit documentation available to clients. 17. The Cost Audit Documentation should be retained for at least ten years from the date of the Cost Audit Report. 7. Effective Date This standard is to be applied for planning the audit of cost Statements for the period commencing on or after 1st April 2012. - - statute, statutory provisions legislation, l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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