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What Are The Advantages Of Cost Audit?

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• To the Management –
o Management gets reliable data for its day-to-day operations like price fixing, control, decision making, etc.
O A close and continuous check an all wastage's will be kept through a proper system of reporting to management.
O Inefficiencies in the working of the company will be brought to light to facilitate corrective action.
O Management by exception becomes possible through allocation of responsibilities to individual managers.
O System of budgetary control and standard costing will be greatly facilitated.
O Reliable check on valuation of closing stock and work-in-progress can be established.
O Helps in detection of frauds and errors.

• To the shareholders –
Cost Audit ensures that proper records are kept as to purchases and utilisation of material and expenses incurred on wages, etc. It also makes sure that the valuation of closing stock and work-in-progress is on a fair basis. Thus, the shareholders are assured of a fair return on their investment.

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