presentation on cost audit by group Harbinger (3rd batch), Dept of accounting and information systems, Jahangirnagar University.

1. COST AUDIT
Presented By
HARBINGER

2. Abstract
This article also aims at analyzing the current scenario
in the field of cost audits in implementation of
government schemes in Bangladesh and traces the
evolution of the concept over the time.
 Scope Of Cost Audit
 Literature Review
 Research Objectives
 Methodology
 Findings & Analysis
 Compliances
 Limitation of the Study

3. About Cost Audit
Explanation
History
Rules and
Regulation
Implementing
in Bangladesh

4. Scope of Cost Audit
 “Maintenance of cost accounting records by the company. Section
209(1)(d) makes it obligatory for a company pertaining to any class of
companies engaged in production, processing, manufacturing or
mining to maintain such particulars relating to utilization of material
or labour or to other items of cost as may be prescribed, if such class
of companies is required by the Central Government to include such
particulars in the books of accounts”
 “The Central Government prescribes the separate cost accounting
records for each class of companies i.e. companies manufacturing a
particular class of product or activity like Cement, Steel, Chemicals
and Electricity etc. and these are called the Cost Accounting Records
Rules for that specific industry or class of companies.”

5. Literature Review
 Our study is closely based upon the review of different books and research findings
and suggestions of various committees/sub-committees set up by the govt. and
institution which is closely connected with cost audit.
 Professor Syed Mohammad Ather, FCMA and Md Hafij Ullah also conducted a study
focusing purpose, application and advantages of cost audit for the incumbent
organizations and also for others interests groups.
 Rubel Ameen, FCMA conducted a study “Social objective of cost audit” on various
aspects like nature, definition, purpose, aspects, structure, dimension, origin, and
magnitudes of the cost audit in Bangladesh. He further discussed about cost audit
and its social objectives, elimination of the limitation of Conventional Balance
Sheets, cost audit in public sectors, creation of cost consciousness, better
management of working capital, verification and valuation of inventories, inter firm
comparison etc. that help us to conduct our study and prompts and strengthens to
assess approaches to the problem.

6. Research Objectives
Understanding the legal provisions regarding cost
audit.
Compare rules and regulations with practical
Understanding the attitude of companies
regarding cost audit.
Evaluate the awareness level of the companies
Evaluate whether cost audit objectives accomplish
successfully.
Examining the main problem regarding cost audit.

7. Methodology
 This research paper is based on secondary data.
 This cost audit (of the cost accounting books) is to be
conducted every year and shall be in addition to the
statutory audit of accounts conducted under section 210
 Cost auditing function is administrated and facilitated by the
cost audit (Report) rules, 1997, Order of the Government
for cost audit, CMA Ordinance, 1977(Ordinance No. LIII of
1977), CMA Regulations,1980 and subsequent amendments.

8. Findings & Analysis
1.Performing Cost Audit
Knowledge of the
industry and the entity:
Updating of knowledge
of industry:
Legal and Regulatory
Framework

9. Findings & Analysis
2. Organizational Set-up:
 Study the organizational set-up of the entity
 Discuss the functional set-up with the top
management

10. Findings & Analysis
3. Company Representations:
 A statement of productions capacity of the plant
 A stock-in-trade of the company
 Give a brief note on the nature of other activities

11. Findings & Analysis
4. Production:
 Adjust the stock-in-process and check the
production in quantities
 Any shortfall in production should be offered in the
cost auditor’s report

12. Compliances
Maintenance of cost
records is a pre
requisite to conduct
the Cost Audit.
Every company
including all
units and
branches.
For each of its
products and
activities
On monthly /
quarterly /
half‐yearly /
annual basis
Variations are to
be clearly
indicated and
explained.
To achieve
optimum
economies in
utilizations of
resources.
To be reconciled
with the annual
financial audited
statements

13. Limitations Of The Study
The cost audit information is
not available in published
financial statement and is not
disclosed to unauthorized
persons.
Confidentiality of data is
another important barrier that
may be faced during the
conduct of the study. Every
organization has their own
secrecy that is not revealed to
others.
Necessary records,
publication may not be
available. This constraint may
narrow the scope of the study
.
Rules and regulations
regarding cost audit are not
clearly described.

14. Conclusion……