Enumerate the Usefulness of Cost Audit to the Government

Cost audit is very useful to government in the following manner:-

1. When the government enters into a cost plus contract, cost audit helps the government to fix the price of the contract.

2. Cost audit helps in fixation of selling price of essential commodities and thus undue benefit is checked.

3. Cost audit enables the government to focus its attention on inefficient units to correct it.

4. Cost audit enables the government to decide in favor of giving protection to certain industries.

5. Cost audit facilitates settlement of trade disputes between the government and other parties.

Related:

1. What is the Difference between Efficiency Audit and Propriety Audit?
2. As a Cost Auditor, What will You Verify on the Areas of Overheads, Indirect Expenditure and Work in Progress?
3. What is procedure for audit of non government organization?