Cost Audit
Cost Audit is even though historical in nature but it has potential of creating cost consciousness and cost competitiveness in the businesses. If we want to compete with china in near future then surely we must have Cost Competitiveness among Indian industry We need to think on it. With the help of this article I will try to explain overall procedure in the cost audit. First step in the cost audit is Trial Balance. In fact this is the first and foremost requirement. The next step is you have to bifurcate Finance Heads of expenses into Costing Heads. For your knowledge followings are the few examples:- Above examples is only illustration purpose. Then you have to identify the expenses and incomes which are not form part of cost audit. (Profit Reco) You also need to prepare Revenue statement… In this sheet you have to prepare revenue statement product and service wise. ( it means if company have 3 major product classes and 2 service then sum of all of these.) MCA has covered the healthcare services under the cost audit wide the companies (Cost Records and Audit) Rules, 2014 dated 30th June 2014. The format for the service cost sheet is very generic for all covered service industries The requirement of reporting under the annexure to cost audit report is not only to segregate the non-operating incomes and expenses and disclose the Financials vs. Costing Reconciliation. The hospitals have to prepare the cost accounting records based on the Specialty Care wise as mentioned above and in addition to that Hospitals shall prepare the Cost Accounting Records as per the clinical practices viz. Critical care (ICU), Diagnostic services, Radiology and Imaging Services, Emergency Procedure, Operating theatres services, Wards services, Pharmacy, Special procedures-operations, Special treatment rooms, Therapies, Laboratory, Blood bank, Biomedical waste management, Mortuary Management, etc.
Validation :
Total of all above must be match with your Financials You must have quantitative and value wise details of Utilities in respective company. Materials quantitative details and value is also required. (Bifurcate material consumption in to Domestic & Imported) You also need to calculate VALUE ADDITION statement (which simply means how much company earns and how it utilized the same)
Value Addition:
Distribution of Earnings to:
One important steps in cost audit is to prepare cost sheet product wise. For this take base actual production and sales quantity as per expenses Sales Quantity is basis for below expenses for other actual production qty You need to extract the data of production made in given time period from system. Other important compliance is Financials Ratios and RPT. For this you can take data from Financials data.
Conclusion:
With the help of this data I just tried to give idea about cost audit and what kind of data required for it. Hope you will find this one helpful. Recommended
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