Criticisms of Cost Audit
The terms ‘cost Audit’ management audit and efficiency audit have been used synonymously by many auditors. It is performed by an independent, professionally qualified Cost and Management Accountant or Chartered Accountant. By the term cost audit is meant the detailed checking of the costing system technique and accounts to verify their correctness and to ensure adherence to the objective of cost accountancy.
There has been some sort of criticism against the introduction of compulsory cost audit in certain industries. A few points of criticism arc given bellow –
(a) It is an interference with the management over matters on which the management is the best judge.
(b) There is no necessity of cost audit when the accounts are audited by and an independent auditor who cheeks the accounts inching the manufacturing account of a company.
(c) Cost audit is overlapping or superimposing on the existing system of financial audit or statuary audit.
(d) There is lot o distinction between financial and cost audit.
(e) It is alleged that the amendment to the companies ACT introducing the cost audit.