Audit of cost accounts in India can be traced back to the year 1925 when large number of firms were given contracts by the Government of India on Cost Plus basis and the Government started verifying and investigating the cost structure of such firms.
Cost audit is the effective tool of cost control in the hands of management to control the costs and produces at competitive rate.It also identify the inefficiencies in the process.It is useful for point out the avoidable wastage and losses.It can be useful for cost control and cost reduction by inter-firm comparison with standard industrial norms or peers in the industries.
According to CIMA cost audit is ” the verification of correctness of cost accounts and of the adherence to the cost accounting plan”
By using cost audit we can comes to know that whether there is proper use of man , machine and material.and avoid the respective loss and maintain the effectiveness in the system.
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10 Comments. Leave new
Good work!
nice article
nice article, with easy explanation.
Good effort
Good article but what would you prefer, internal or external audits?
Short and precise you could have explained it more. Still good effort.
well explained
Nice to see someone write on cost audit. I hope you can write more about it and emphasis on its process, importance and functions.
I totally agree with akul’s comment. Something besides the definition would havr added a charm to your article. Nevertheless good efforts.
short and to the point 🙂