In a liberalised scenario, does mandatory cost audit continue to be relevant?
It is a wrong perception that cost audit is not relevant in a liberalised scenario as the prices are market driven and not based on cost. It is a very narrow interpretation of the role of cost audit. Cost audit has to play a major role in consumer protection. The consumers, in a liberal economy, are vulnerable to practices such as monopoly or predatory pricing. Curbing these practices require a harmonised and authentic cost database. Such a database is also essential in pricing of essential goods and regulating the interests of the Government and the public. Considering this, the Standing Committee on Economic Legislation has recommended the extension of cost records and cost audit to various sectors, including fuels, medical and surgical appliances, transportation, industrial machinery, agricultural/earthmoving machinery and defence. Besides, cost audit can play the role of whistle blower in corporate governance framework, as it addresses the value addition or value erosion, as the ca
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