Cost Audit MCQs 2026

A key aspect of Material cost audit testing is that it involves

1. Aignore production records✓
2. Bonly audit office rent✓
3. Conly sales commission✓
4. Dverification of raw material consumption and pricing✓

Capacity utilization verification in the context of Cost Audit refers to

1. Acost audit may examine idle capacity and under-absorption✓
2. Bcapacity irrelevant to cost audit✓
3. Conly financial audit examines capacity✓
4. Dnever review production volumes✓

Cost Audit: Cost audit working papers can be defined as

1. Ano papers required✓
2. Bonly client marketing slides✓
3. Cdocument examination of cost ledgers and production reports✓
4. Ddestroy immediately after visit✓

Regarding Qualification of cost auditor in Cost Audit, the accurate view is

1. Aany person without qualification✓
2. Bonly medical doctor✓
3. Cchartered accountant or cost and management accountant as prescribed✓
4. Donly architect✓

A key aspect of Cost audit report is that it involves

1. Asame as tax audit report always✓
2. Bonly verbal report to foreman✓
3. Ccost auditor reports on cost statements and compliance with cost accounting records✓
4. Donly social media post✓

Related party transactions in cost audit is best described as

1. Aignore all internal transfers✓
2. Btransfer pricing between divisions scrutinized✓
3. Conly external sales matter✓
4. Dno documentation of transfer prices✓

In Cost Audit, Cost audit and pricing regulation primarily means

1. Anever used for pricing✓
2. Bonly for advertising budget✓
3. Cregulated utilities may link tariffs to audited costs✓
4. Donly for HR hiring✓

Which statement about Cost audit vs financial audit is correct

1. Aidentical scope always✓
2. Bcost audit focuses on cost records financial audit on FS overall✓
3. Ccost audit replaces financial audit✓
4. Dfinancial auditor never considers cost✓

In Cost Audit, Wastage and spoilage audit primarily means

1. Awastage never recorded✓
2. Breviewing norms and actual wastage in production✓
3. Caudit ignores scrap sales✓
4. Donly audit finished goods dispatch✓

In Cost Audit, Cost auditor appointment primarily means

1. Aall shops always require cost audit✓
2. Brequired for companies engaged in specified industries per SECP✓
3. Cnever required in Pakistan✓
4. Dappointed by employees union only✓

Cost Audit: Inventory valuation in cost audit can be defined as

1. Aonly count units without cost✓
2. Bignore WIP entirely✓
3. Conly retail FIFO always without test✓
4. Dwork-in-progress and finished goods cost build-up verified✓

Regarding Standard costing review in Cost Audit, the accurate view is

1. Acomparing actual costs to standards and analyzing variances✓
2. Bstandards never used in industry✓
3. Cvariances ignored in audit✓
4. Donly financial ratios without cost sheets✓

In Cost Audit, Energy and fuel cost audit primarily means

1. Anever material in Pakistan industry✓
2. Bsignificant for cement textile and power intensive industries✓
3. Conly audit paper clips✓
4. Dignore utility bills✓

Cost Audit: Cost audit in sugar industry can be defined as

1. Ahistorically regulated sector with detailed cost scrutiny✓
2. Bnever subject to cost audit✓
3. Conly services sector regulated✓
4. Donly IT companies require cost audit✓

Regarding Export cost certification in Cost Audit, the accurate view is

1. Anever needed for exports✓
2. Baudited cost may support duty drawback or pricing claims✓
3. Conly import duties matter✓
4. Dcustoms ignores cost statements✓

SECP cost audit directions in the context of Cost Audit refers to

1. ASECP has no role in cost audit✓
2. Bonly FBR issues cost directions✓
3. Conly ICAP sets all law✓
4. Dregulator may issue directions on cost audit scope and filing✓

In Cost Audit, Cost audit primarily means

1. Aonly audit of share register✓
2. Bonly trademark review✓
3. Csystematic verification of cost records and cost statements✓
4. Donly employee leave records✓

Cost Audit: Cost accounting records order can be defined as

1. Ano records required for manufacturing✓
2. Blegal requirement to maintain prescribed cost accounting records✓
3. Conly marketing expenses records✓
4. Donly email archives✓

Which statement about Labour cost audit is correct

1. Aonly audit CEO salary always✓
2. Bignore timekeeping✓
3. Conly marketing staff labour✓
4. Dreviewing wage rates overtime and labour hour records✓

Overhead allocation audit is best described as

1. Aaccept any allocation without test✓
2. Bexamining basis for allocating indirect costs to products✓
3. Conly variable costs exist✓
4. Doverhead never audited✓