Admin Table of Contents
Why is it necessary to keep cost records?
Cost records need to be included in the books of accounts of the companies being engaged in the production of goods or provision of service as covered under the table A or Table B and the total turnover from all its production or service in more than INR 35 crore during the preceding financial year.
What is cost record?
The definition of the word ‘cost records’ has been provided under rule 2 (e) of the Companies (Cost Records and Audit) Rules, 2014 which means books of account relating to the utilization of materials, labour and other items of cost as applicable to the production of the goods or provision of services as provided in …
What are the cost records to be maintained?
(w) The cost of indirect material with life exceeding one year shall be included in cost over the useful life of the material.
- Employee Cost.
- Utilities.
- Direct Expenses.
- Repairs and Maintenance.
- Fixed Assets and Depreciation.
- Overheads.
- Administrative Overheads.
- Transportation Cost.
What is the purpose of cost audit?
A cost audit represents the verification of cost accounts and checking on the adherence to cost accounting plan. Cost audit ascertains the accuracy of cost accounting records to ensure that they are in conformity with cost accounting principles, plans, procedures and objectives.
What are the advantages of cost audit?
Advantages of Cost Audit to the Management
- It provides necessary information for prompt decision decisions.
- It helps management to regulate production.
- Errors, omission, fraud, and mistakes can be detected and prevented due to the effective auditing of cost accounts.
Why cost audit is needed in a manufacturing company?
A cost audit provides the government with a clear picture of the company’s production costs and profit margins. Through the cost audit companies can check the accuracy of their cost accounts, helping to preventing errors and limit fraud exposure.
What is Cost Accounting Record Rules?
Cost accounting Record Rules are the prescribed details by the Central Government w.r.t utilization of material , labour or other items of cost in respect of a class of companies notified under the provisions of Companies Ac,1956. These cost audit orders are issued on the selected companies only.
What is cost accounting records?
What are the advantages and disadvantages of cost audit?
(i) Proper audit of cost accounts helps in revealing errors. frauds and inconsistencies. (ii) Cost audit brings reliability in cost reports on the basis of which important decisions are taken. (iii) By concerete suggestions cost audit can being about improvement in systems and procedures.
What is cost audit advantages and disadvantages?
What is cost audit and its features?
FEATURES OF COST AUDIT: The cost audit of the companies under the relevant provisions of the Companies Act, 1956 has the following features: (i) Assessing compliance of the relevant cost accounting records rules as applicable to the product under review; (ii) Study of the costing system to assess whether it is adequate …
What are advantages and disadvantages of cost audit?