Cost Audit is a specialized audit focusing on the verification of cost records and accounts, ensuring that costing principles and standards are correctly followed.
It not only helps businesses comply with regulatory requirements but also provides insights to optimize costs, improve profitability, and strengthen internal cost controls.
Verification of Cost Records:
Examining the cost accounting records maintained under the Companies Act and relevant Cost Accounting Standards.
Cost Compliance Audit:
Ensuring adherence to Cost Audit Rules, Cost Records Rules, and applicable provisions of the Companies Act, 2013.
Cost Audit Report Preparation and Filing:
Preparation and submission of the Cost Audit Report in the prescribed formats (CRA-3, CRA-4) to the Board of Directors and to the Ministry of Corporate Affairs (MCA).
Product Costing Analysis:
Detailed analysis of product-wise or service-wise costs, helping identify areas for price optimization and margin improvement.
Budgetary Control and Variance Analysis:
Comparing actual costs with budgets to identify variances, their causes, and providing corrective recommendations.
Process Costing and Operational Efficiency Review:
Examining production processes to ensure cost control, wastage reduction, and efficient resource utilization.
Cost Structure Review:
Analyzing cost allocation methodologies across departments, projects, and business units.
Profitability Analysis:
Studying profitability at the product, service, and customer level to support better strategic decisions.