Cost accounting systems When auditing a manufacturing concern, what major inquiries might be made by the auditor about the cost accounting system?
An auditor would be likely to make the following inquiries about a cost accounting system used by a manufacturing concern:
? The method for developing standards costs.
? How recently the standards have been updated.
? The method for identifying components of overhead and allocating overhead to products.
? The methods used for identifying variances, following up on their causes, and allocating them to inventory and cost of goods sold.
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