Cost Auditing

How Does Cost Auditing Work?

Cost auditing involves the verification of cost records and cost accounts to ensure that cost statements are accurate, complete, and in compliance with statutory regulations. It is mandatory for specific classes of companies involved in manufacturing or production, as notified under the Companies (Cost Records and Audit) Rules.

A cost audit not only ensures regulatory compliance but also promotes financial discipline, improves internal cost control, and provides valuable insights for strategic pricing, budgeting, and forecasting.

✅ Our Comprehensive Cost Auditing Services Include:

1. Statutory Cost Audit

• Audit performed under Section 148 of the Companies Act, 2013

• Preparation and filing of:

  • CRA-3 (Cost Audit Report)

  • CRA-4 (XBRL format submission to MCA)

• Ensuring compliance with Cost Accounting Standards (CAS) and applicable MCA rules

2. Maintenance & Review of Cost Records

• Systematic recording of costs related to:

  • Production

  • Operations

  • Services

• Identification of cost inefficiencies, wastage, and leakages

• Suggestions for internal controls and cost-saving measures

• Assistance with maintaining cost records in CRA-1 format

3. Product and Process Costing

• Detailed analysis of cost by:

  • Product

  • Process

  • Cost centers

• Classification of costs into:

  • Direct & Indirect

  • Fixed & Variable

• Benchmarking of input costs and resource utilization

4. Forecasting & Budgeting Assistance

• Establishment of cost allocation mechanisms and cost centers

• Preparation of:

  • Budgets

  • Variance reports

• Advisory for strategic pricing, margins analysis, and cost planning

5. Internal Cost Audit (Non-Statutory)

• Internal cost audits for management review and decision-making

• Evaluation of:

  • Pricing strategies

  • Profitability planning

  • Operational competitiveness

• Enhances transparency and boosts investor confidence