Verifi cation of Cost Proformae and Annexures

Verification of Cost Proformae and Annexures:-


(a) The cost auditor has to examine all the cost accounting records, cost statements, other books and
documents, annexures and proforma to the report and other relevant data in course of his audit
work. Such examination of the cost and fi nancial statements by the cost auditor may include the
following –
1. Financial position including fi nancial ratios as required to be stated in Para 24 of the Annexures
to the Cost Audit Report Rules.
2. Licensed capacity, installed capacity, production and capacity utilized (Para 4).
3. Consumption of raw materials, power and fuel, salary and wages, stores and spare parts,
provision for depreciation, expenditure on overheads, royalty and technical know-how
charges, quality control expenses, pollution control expenses, abnormal non-recurring costs
and other items.
4. Sales realization – local and export unit and total for each variety of product.
5. Cost proformae maintained by the company as per cost accounting records rules.
6. Reconciliation with fi nancial books.

(b) As mentioned earlier, the examination of cost proformae as per provisions contained in relevant
cost accounting records rules and other items mentioned above may commence only after the end
of the accounting year when all the closing entries are passed through the books of account.