Are expenses and costs analyzed and reported?
1. Review chart of accounts and identify which expense/cost should be mainly managed. 2. Interview Marketing Planning Team general manager to understand how they manage expense/cost. 3. Review expense budget for the following: a) the budget is based on reasonable assumptions. b) the budget reflects the department’s needs. c) increase or decrease in budget is reasonably determined and approved. 4. Review budget vs. actual analysis to determine if the budget is effectively controlled. Check if the budget is modified as the goal changes (flexible budget). 5. Select a sample of expense vouchers for a certain period and test whether the expenses are complying with the Company’s manual, approved by authorized personnel, and summed up for cost-related reporting. 6. Determine if extraordinary increase or decrease in budget (called “special approval”) is sufficiently reviewed and approved. 7. Determine if management reporting on cost management is based on reliable data and provides management
