How would you audit the operating expenses?

Question

Accepted Answer

To audit operating expenses, review financial records, analyze expense categories, compare actual expenses to budgeted amounts, and identify any discrepancies or inefficiencies.

Review financial records, such as income statements and general ledger accounts, to identify all operating expenses.
Analyze expense categories to ensure proper classification and allocation of expenses.
Compare actual expenses to budgeted amounts to identify any significant variances.
Investigate any discrepancies or inefficiencies in operating expenses and determine the root causes.
Assess the reasonableness of expenses by benchmarking against industry standards or historical data.
Verify the accuracy of expense documentation and supporting records.
Evaluate the effectiveness of cost control measures and identify opportunities for cost savings.
Document findings and recommendations in an audit report.

Accepted Answer

Have a good idea of vouching, scrutiny, and ratio analysis for the same.

How would you audit the operating expenses?

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