Explain the objectives of cost audit.

To begin with, think about the definition of an audit.  It
is the review of something, usually financial records.  In the case of a cost audit the
financial records being reviewed relate to the cost of something, usually something
manufactured.

 The key objectives
are:

1. To address internal controls over inventory and
cost of goods sold. 

2. Verify correct records and costs
related to inventory.

3. To be certain the cost of goods
produced is accurate.

4. To be certain that accounting
procedures related to inventory and cost of goods sold follow correct accounting
procedures.

5. To be certain that the inventory on hand
actually belongs to the client.