Introduction of SCA 101 to 119 By cma

Introduction of SCA 101 to 119 By cma pradip h desai

SCA 101 Planning An Audit of Cost Statement � Planning an audit of cost statements, records and other related documents is considered necessary to ensure achievement of audit objectives with available resources and securing coordination with the auditee on audit work.

SCA 102 Cost Audit Documentation �The purpose of this Standard is to provide guidance to the members in preparation of Audit Documentation in the context of the audit of cost statements, records and other related documents.

SCA 103 Overall objective of the independent Cost Auditor This Standard on Auditing deals with the overall objectives of the independent cost auditor, the nature and scope of a Cost audit the independent auditor’s overall responsibilities when conducting an audit of cost statements in accordance with Cost Auditing Standards. It also explains the requirements establishing the general responsibilities of the independent auditor applicable in all audits, including the obligation to comply with the Cost Auditing Standards. � The independent Cost Auditor is referred to as “Cost auditor” hereafter �

SCA 104 Knowledge of business, its process and Business Environment In performing an audit of cost statement, records and other related documents, the cost auditor should have the knowledge of the client’s business to enable him to understand the processes and express his opinion on the cost statements. � The cost auditor’s level of knowledge for a cost audit engagement should include a general knowledge of the economy and the industry within which the entity operates, and a more particular knowledge of how the entity operates. �

SCA – 105 Agreeing the Terms of Cost Audit Engagements � This Standard deals with the cost auditor’s responsibilities in agreeing the terms of the cost audit engagements with management. This includes establishing that certain preconditions for cost audit rest with management. This standard deals with those aspects of engagement acceptance that are within the control of the cost auditor.

SCA-106 Audit Sampling �This standard applies when the Cost Auditor has decided to use Audit Sampling in performing audit procedures for the audit of cost statements, cost records and other related documents.

SCA -107 Audit Evidence � The purpose of this standard is to explain what constitutes audit evidence in an audit of cost statements, cost records and other related documents. This standard is applicable to all audit evidence obtained during the performance of cost audit procedures.

SCA-108 Materiality in Planning and Performing a Cost Audit �The purpose of this standard is to establish requirement regarding the cost auditor’s consideration of materiality in planning and performing cost audit.

SCA-109 Cost Auditor’s Responsibility relating to Fraud in an Audit of Cost Statements � The purpose of this Standard is to deal with the cost auditor’s responsibilities in understanding, differentiating misstatements with fraud, its detection, and reporting it to the concerned authorities in case any fraud is detected in the audit of cost statements.

SCA-110 Written Representations � The purpose of this Standard is to provide guidance to obtain written representations from management as audit evidence, the procedures to be applied in evaluating and documenting written representation, and the actions to be taken if management refuses to provide appropriate representations.

SCA-111 Evaluation of Misstatements identified during the Cost Audit The purpose of this Standard is to assist the cost auditor in evaluating the misstatements identified during the audit. � The standard requires cost auditor to assess whether an individual misstatement or aggregate of misstatements approaches materiality; if so, communicate the same with management for appropriate correction; evaluate the effect of uncorrected misstatements; communicate with those charged with governance; and appropriately document the conclusions and the basis for arriving at the conclusions. �

SCA-112 Analytical Procedures � This Standard deals with the cost auditor’s use of analytical procedures as substantive procedures and cost auditor’s responsibility to design and perform analytical procedures near the end of the audit that will assist in forming an overall opinion on the cost statements.

SCA-113 Using the work of internal Auditor � This SCA addresses the cost auditor’s responsibilities when, based on the cost auditor’s preliminary understanding of the internal audit function obtained as a result of procedures performed under SCAs, the cost auditor expects to use the work of the internal audit function as part of the audit evidence obtained. Such use of that work modifies the nature or timing, or reduces the extent, of audit procedures to be performed directly by the cost auditor.

SCA-114 Using the Work of Cost Auditor's Expert � This Standard deals with the cost auditor’s responsibilities regarding the use of an individual or organization’s work in a field of expertise other than accounting or auditing, when that work is used to assist the cost auditor in obtaining sufficient appropriate audit evidence.

SCA-115 Communication with Those Charged with Governance The purpose of this standard is to establish requirements for the cost auditor to communicate with those charged with governance in an audit of cost statements.

SCA-116 Communicating Deficiencies in Internal Control to Those charged with Governance and Management � The purpose of this Standard is to establish requirements and explains that the cost auditor is required to obtain an understanding of internal control relevant to the cost audit when identifying and assessing the risks of material misstatement � This SCA specifies which identified deficiencies the cost auditor is required to communicate to those charged with governance and management

SCA-117 Identifying and Assessing the Risks of Material Misstatement � This standard describes the audit procedures to identify and assess the risk of material misstatements and control activities relevant to the cost audit so that information obtained by performing such risk assessment procedures and related activities may be used by the cost auditor to determine the appropriate audit evidence to support assessments of the risks of material misstatement.

SCA-118 The Cost Auditor’s Responses to Assessed Risks � This Standard on Cost Auditing establishes requirements and provides application and other explanatory material regarding the auditor’s responsibility to design and implement responses to the assessed risks of material misstatement in audit of cost statements.

SCA-119 Related Parties � The purpose of this standard is to establish requirement to assist the cost auditor in identifying and assessing the risks of material misstatement associated with related party relationship and transaction, � And in designing cost audit procedures to respond to the assessed risk associated with such related party(s).

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