Business Bureau :
THE Institute of Cost Accountants of India, Nagpur Chapter recently organised a webinar on ‘How to conduct cost audit’. The event commenced with welcome address by CMA Lakshman S Thawrani, Chairman, Nagpur Chapter. Regional Council Member CMA Shriram Mahankaliwar made the opening remarks and elaborated the need for conduct of the such type of webinar for strengthening the faculties of the members in industry and practice. The guest of honour for the webinar was CMA B Pandurangan, Manager Finance (Cost & Budget) at Western Coal Fields Ltd (WCL Ltd), Nagpur. He highlighted about the system of cost audit presently prevalent in WCL. Coal is the only item produced by WCL and cost audit is a statutory requirement and all formats as required by the statute are to be certified by auditors. Unit wise consolidation of all the cost sheets of mines and service units are to be audited by the cost auditors like the Internal Cost Control System Review (ICCS) requires periodic review of cost records and cost auditor will be required to analyse the workings of a unit/mine.
He said that the present system based on records maintained on yearly basis are on the yearly accounting system where the gap is very wide. It needs to be cut down to quarterly system. So that the improvement can be carried out in the short span of time rather than waiting for the entire year which becomes late and costlier as the corrective measures cannot be implemented immediately. CMA Chandrashekhar Adawadkar, Senior Practicing Cost Accountant said that there should be periodic communication with client in order to update them about rules/amendments in conduct of the audit. Prepare audit plan and discuss with client for responsibility and compliance dates. Ensure proper evidence in any form along with working sheets are maintained for audit work.
Also, highlight the value addition through the audit process. Try to get the annexures to cost audit approved in same meeting of Audit Committee or board in which financial statements are approved. Cost audit report should be discussed and adopted in conformity applicable rules Generally Accepted Cost Accounting Principles (GACAP) and Cost Accounting Standards (CAS). “Where the cost auditor is in doubt or is not satisfied with the answers to his audit queries it is always prudent to disclose in his observation,” he said. The workshop was moderated by CMA Renu Kulkarni. CMA S Rajat Naidu, Secretary Nagpur Chapter of Cost Accountants proposed the vote of thanks.