Future Proofing Cost Audit Framework

Abstract

Right from the time Cost Audit has been introduced, the main objective, reporting methodology are undergoing frequent changes accompanied by a churn in the entire spectrum. While all stakeholders, whether internal or external are clear that it should help in improving the business performance, the ground reality is it has been treated more as a compliance than as a value adding exercise. The Institute guidance notes are more procedure oriented, dwelling to some extent on the real objective behind the cost audit. At the same time, as it is part of the statute, it cannot go beyond the mandate provided under law. This article explores the emerging contours of requirement of business and how the cost audit can emerge from the cocoon of compliance to a value adding butterfly, which will future proof the cost audit framework.