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Cost Audit and Assurance Standard on Cost Audit Documentation

CAAS - 102 - Rule - Companies Law - CAAS - 102 - CAAS - 102 The following is the Cost Audit and Assurance Standard (CAAS 102) on "Cost Audit Documentation". In this Standard, the standard portions have been set in bold italic type. This Standard should be read in the context of the background material, which has been set in normal type. 1. Introduction The purpose of this Standard is to provide guidance to the members in preparation of Audit Documentation in the context of the audit of .....

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of cost statements and other cost related information. The specific documentation requirements of other CAAS's do not limit the application of this CAAS. Laws or regulations may establish additional documentation requirements. 4. Definitions The following terms are being used in this Standard with the meaning specified. 4.1 Audit: An audit is an independent examination of financial, cost and other related information of an entity whether profit oriented or not, irrespective of its size or l .....

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dit. 4.4 Audit working papers: Audit working papers are the documents which record all audit evidence obtained during audit. Such documents are used to support the audit work done in order to provide assurance that the audit was performed in accordance with the relevant Cost Audit and Assurance Standards. 4.5 Cost Auditor: "Cost Auditor" means an auditor appointed to conduct an audit of cost records, under sub-section (2) of section 233B of the Companies Act and shall be a cost account .....

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the partner or other person in the firm who is a member of the Institute of Cost Accountants of India and is in full time practice and is responsible for the Assignment or audit and its performance, and for the report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body. 4.7 Assignment or audit Team: Assignment or audit team means all personnel performing an Assignment or audit, including any experts contracted .....

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dit procedures performed, the Cost Auditor shall record the characteristics of the specific items or matters tested the responsibility for performing and reviewing such procedures and the relevant dates. 5.3 The Cost Auditor shall prepare audit documentation that is sufficient to enable another Cost Auditor undertaking a peer review to understand: • Conformance of audit procedures performed with legal and regulatory requirements; • Conformance to cost audit and assurance standards &bul .....

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and outsiders. 5.7 The Cost Auditor shall record any audit procedures performed in exceptional circumstances after the Cost Audit Report or new conclusions reached after that date. 6. Application Guidance 1. The Cost Audit documentation will usually contain • Checklists Example: Checklist of compliance with industry specific Record Rules, Checklist of compliance with Measurement Principles in CAS, Checklist of Disclosure requirements as per CAS • Audit programs Example: Audit Program .....

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y terms, O & M contracts, Terms of supply of contract labour and others • Letters of confirmation Example: Stock of materials with subcontractors. • Letter of Representation from Management • Correspondence (including e-mail) concerning significant matters. Example: Correspondence regarding terms of supply of goods and services. 2. Audit documentation may be in paper form or electronic form. Where it is in electronic form, special care may be required to protect against accide .....

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om other documentation. For example consumption of materials by product from technical norms, normal price for a related party contract from Cost Auditor's own sources of data of the industry. 5. Audit documentation must be sufficient and oral explanations by the Cost Auditor cannot substitute for such documentation. 6. Audit documentation must contain evidence of conformance to requirements of Cost Audit and Assurance Standards in respect of this Standard and other standards. Typical of suc .....

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ptional circumstances, the Cost Auditor finds it necessary to perform alternative audit procedures different from a corresponding requirement in a Cost Audit and Assurance Standards, the Cost Auditor shall document how the alternative audit procedures performed achieve the aim of that requirement, and the reasons for the departure. 8. Determining what are significant matters in an audit to warrant their inclusion in the documentation must be objectively done. The conclusions reached and the appl .....

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tatement is also a significant matter. The Cost Auditor may have reached a certain conclusion regarding the misstatement of the Material Cost in a Cost statement based on the availability of a well documented Bill of Materials but his assessment of risk may undergo a change if he finds that there is considerable use of substitute and alternate materials in the actual production process. Matters that cause the Cost Auditor significant difficulty in applying necessary audit procedures are also sig .....

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checking, the basis used for selection, for example issues of spares above a certain value, and the documents selected. 11. Names of the team member preparing specific audit documents and details of their review by the Cost Auditor are a necessary part of the Audit Documentation. 12. Reference was made earlier to Minutes of discussion with client personnel but audit documentation may also include Minutes of Discussion with third parties seeking information or confirmation. 13. The Cost Audit Do .....

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