Purposes or objectives of cost audit can be highlighted as follows:
1. Cost audit is conducted to prove the accuracy and fairness of costing data related to production, operation, process etc.
2. To verify whether the books of accounts are maintained according to the cost accounting principles or not.
3. To detect and prevent errors and frauds of cost accounts
4. Another objective of cost audit is to maintain proper record of inventory and work-in-progress.
5. To determine actual cost of production which helps to fix the fair selling price of the product.
6. Wastage minimization is also the main objective of cost audit. It helps to reduce the production by minimizing wastage and proper utilization of resources.
7. To improve the productivity of the business firm.
8. To help the management in decision making process by providing relevant cost data and information.
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Also Read:
9. To provide data for tax purpose
10. It is also useful for budgetary control and standard costing.
11. It provides the actual picture of business to investors.
12. It helps to improve the performance of workers by creating moral influence.
