The audit, in fact, is an independent examination of the calculations and reporting of an economic entity in order to verify accounting, as well as the completeness of reflection of all operations performed in accounting, the accuracy of the reflection of numbers in financial documents and the compliance of accounting documents with the legislation of the Russian Federation.
Comprehensive audit affects all financial indicators of the enterprise and is divided into various stages. Audit of production costs is a mandatory integral part of the audit of the enterprise as a whole. Indeed, in the process of conducting it, weak spots of production are identified at certain stages of the manufacturing process, and irrational types of expenses are also shown, optimal ways to reduce all types of costs are explored, any hidden opportunities for increasing profits are developed.
Audit of production costs is carried out in accordance with the thematic program, including audit planning, audit risk assessment, in direct proportion to the general state of accounting and own internal control at the enterprise.
Cost verification, or otherwise audit of production costs, first of all begins with the collection of information and study of the production process. The following is a continuous, selective or visual check of all costs (attributable to cost and not attributable). Along with these questions, the correctness of accounting as a whole is being investigated.
The main points that are paid close attention when conducting an expert audit of production costs are the accounting methods used, the use of estimated costing for individual orders at various stages of the production process. The most important points in the audit of production costs include the reasonableness of the distribution of the cost part for the reporting time periods. Evaluation of the correct consumption of auxiliary materials (fuel, industrial oils, electricity and others) also plays a large role in monitoring. Verification of the calculation of depreciation costs for fixed assets, the validity of including intangible costs and low-value assets in the cost of production is carefully studied and checked according to actually submitted primary documents.
The control of the correctness of payroll to the main workers and auxiliary workers is also included in the audit of production costs. In the process of transporting finished products to warehouses, commercial expenses arise (packaging, advertising of goods, business trips, etc.). All of these costs are also carefully verified and verified. Indeed, indirect production costs also affect the pricing and selling price of products manufactured by the enterprise.
After checking the validity of classifying the cost of the cost and identifying the correctness of cost accounting, the expert (auditor) carefully examines issues related to the tax base. At the same time, the timeliness of making mutual settlements between the enterprise and the budget for all mandatory taxes and payments is also checked. An audit of cost accounting for production is very valuable for the enterprise, as its results will allow managing managers to reduce or completely eliminate irrational costs, minimize possible production costs in the future. The entire production process should be carried out taking into account the correct planning of the residual quantity of inventories in the warehouse. To produce output, avoiding downtime of production capacities and, as a consequence of this, the appearance of unplanned expenses for the payment of involuntary downtime to the main workers and support staff.