As a Cost Auditor, What will You Verify on the Areas of Overheads, Indirect Expenditure and Work in Progress?

As a cost auditor, I  shall verify with my team on the area of overheads and indirect expenses as below:-

1. We shall see that allocation of indirect expenditure over production, sale and distribution is it logical and correct or not.


2. Then, we shall compare the value of product in a production with overhead charged.

3. Actual indirect expenditure shall not exceed budget or standard expenditure significantly and that any variations are satisfactory explained and accounted for.

4. We shall view the correctness of appropriate allocation of overhead expenditure (both production and sales) and certify this.

5. We shall also check that allocation of overheads between finished and unfinished products is in accordance with correct principles.

6. Has the work in progress been physically verified and that it agrees with the balance in the incomplete cost cards?

7. As a cost auditor, we shall verify that the valuation of the work in progress is correct with reference to the stage of completion of each job.

8. To verify over valuation or under valuation of opening work in progress and closing work in progress.