Planning and Structuring the Cost Audit

Planning and Structuring the Cost Audit:-

Need for Planning an Audit:-


(a) The Cost Auditor should always plan to conduct an effective cost audit in an effi cient and timely
manner. This is very necessary to attain objectives of the cost audit. Audit plan for new client will
be generally more detailed than in case of a repeat audit. In case of new audit, the cost auditor has
to collect all information about the company like nature of business, organization structure, key
personnel, accounting system etc. Similarly, he has to also collect information about other peers
in the industry, nature of problems etc. The details required shall be much less in case of a repeat
audit. The proper planning helps in:
(a) appropriate attention to all the areas for comprehensive audit;
(b) identifi cation of key areas needing more attention;
(c) timely completion of work;
(d) optimum utilization of assistants;
(e) no overlapping and proper co-ordination between the work done by different assistants,
other auditors and experts.