Cost Audit Report

On completion of an audit, an auditor has to submit his audit report incorporating a certificate regarding the correctness or otherwise of accounts along with his suggestion, if any, for improvements in the operation.

The report should be concise and submitted to the appropriate authorities at the right time to be of effective use to the parties concerned. It should comply with statutory provisions, if any.

Annexure to Cost Audit Report

Generally, a cost audit report contains the following matters.

1.      1. General Information: This includes;

·         Name and address of the concern/firm.

·         Date of the company’s registration.

·         Types of company i.e., public or private.

·         Brief description of the company’s function.

·         Location of the factory.

·         Opening date of commercial production.

·         Types of accounts.

·         Production capacity.

2.      2. Cost Accounting System: Here, the cost auditor mentioned whether the accounts are maintained according to the GAAP or cost accounting system. Generally, cost accounting methods include;

·         Cost accounting system regarding materials.

• Cost accounting system regarding labor.
• Depreciation, overhead, and its allocation on production cost.
• The condition of by-product, joint product, etc.

3.      3.Financial Position: It includes;

·         Capital employed.

·         Net worth.

·         Profit before tax.

·         Expenses to be specified.