Manufacturing audit services
Audit and assurance built for manufacturing businesses
Manufacturing companies carry unique audit complexity. Cost of goods manufactured, raw material consumption, work-in-progress valuation, job work compliance under GST, excise duty history, cost audit obligations under the Companies Act, and factory payroll including contract labour compliance all create audit requirements that go beyond what a standard statutory audit addresses. Manufacturing companies need an audit team that understands production accounting and can verify cost records at the line level.
Cred Books provides manufacturing audit services for small and mid-size manufacturers, large industrial units, MSME factories, and multi-plant businesses. We understand standard costing, material usage variance, overhead absorption, and the specific cost accounting rules applicable to manufacturing companies under the Companies (Cost Records and Audit) Rules. Our manufacturing accounting services ensure your cost records are maintained correctly throughout the year.
What does a manufacturing audit actually cover?
A manufacturing company audit covers raw material consumption verification against production records, work-in-progress and finished goods valuation at standard or actual cost, factory overhead absorption and variance analysis, job work material reconciliation under GST Rule 45, input tax credit verification on raw material and capital goods purchases, Section 44AB tax audit for factories above turnover threshold, and compliance with the Factories Act payroll provisions including bonus, gratuity, and contract labour.
For companies subject to Cost Audit under the Companies (Cost Records and Audit) Rules, we prepare the cost audit report and ensure cost records comply with the applicable CAS standards. Our manufacturing accounting team maintains cost records and financial accounts in the format required for audit throughout the year.
Why manufacturing companies need specialist audit services
Cost Audit And Cost Records Compliance
Companies in regulated sectors like pharmaceuticals, chemicals, fertilisers, and other industries above turnover thresholds must maintain cost records and get a cost audit conducted under the Companies (Cost Records and Audit) Rules. Non-compliance results in penalties and director liability.
GST Job Work And ITC Compliance
Manufacturers sending goods for job work must comply with GST Rule 45 challan and return movement procedures. ITC on capital goods and raw materials must be tracked across plant locations. Non-compliance leads to ITC reversals and GST demand notices.
Inventory And Production Cost Accuracy
Closing inventory valuation directly affects reported profit. Manufacturing companies that use standard costing or FIFO must maintain consistent valuation policies and reconcile physical inventory against the production records at each period end to produce accurate financial statements.
Our manufacturing audit and assurance services
Statutory Audit For Manufacturers
Companies Act statutory audit for manufacturing companies with specialist understanding of inventory valuation, cost of goods manufactured, and plant and machinery depreciation.
Cost Audit For Manufacturers
Cost audit under the Companies (Cost Records and Audit) Rules, covering CAS standard compliance, cost sheet preparation, per-unit cost analysis, and cost audit report filing with MCA.
GST Audit For Manufacturing
ITC reconciliation on raw material, capital goods, and input services, job work compliance under Rule 45, and GSTR-2B reconciliation with purchase registers for manufacturing businesses.
Manufacturing Internal Audit
Operational internal audit covering material procurement controls, inventory management, production planning accuracy, payroll and contract labour compliance, and capital expenditure authorisation.
Tax Audit Under Section 44AB
Form 3CA/3CD for manufacturing companies exceeding the turnover threshold. Covers inventory valuation method disclosure, TDS on contractor payments, and GST reconciliation in Form 3CD clauses.
Production Cost And Raw Material Audit
Raw material consumption reconciliation against bill of materials, waste and scrap accounting, yield ratio verification, and production order cost variance analysis for manufacturing units.
Manufacturing audit compliance areas we cover
Factory Audit Services
Statutory and internal audit for factories covering production records, inventory valuation, labour compliance, and plant and machinery accounting.
Manufacturing Company Audit
Annual statutory audit with specialist manufacturing knowledge covering cost of goods manufactured, overhead absorption, and inventory valuation policies.
Cost Audit For Manufacturers
Mandatory cost audit under Companies (Cost Records and Audit) Rules for regulated industries, including pharmaceutical, chemical, fertiliser, and other notified sectors.
GST Audit For Manufacturing
ITC audit on raw material, capital goods, and input services. Job work challan compliance and GSTR-2B reconciliation with purchase registers.
Production Cost Audit
Per-unit cost analysis, raw material consumption to production reconciliation, yield and scrap accounting, and overhead absorption rate verification.
Plant And Machinery Audit
Capital expenditure approval verification, depreciation rate compliance under Schedule II, and physical verification of plant and machinery assets at the factory.
Manufacturing Internal Audit
Risk-based internal audit covering procurement controls, stores management, job work compliance, contract labour records, and capital expenditure controls.
Raw Material Audit
Raw material stock reconciliation against purchase records, consumption against bill of materials, and material variance analysis for manufacturing units.
Manufacturing Tax Audit
Section 44AB tax audit with manufacturing-specific disclosures including inventory valuation method, TDS on job work and contractor payments, and GST reconciliation.
Manufacturing audit services: what to expect from Cred Books
Raw Material And Production Reconciliation
We reconcile raw material consumed against production records and bill of materials, identify material usage variances, and verify that scrap and waste are correctly accounted and reported.
Inventory Valuation And Physical Verification
Closing stock at raw material, WIP, and finished goods level is verified for valuation consistency. Physical verification is reconciled against book stock with all discrepancies documented and addressed.
GST ITC And Job Work Compliance
ITC claimed on inputs and capital goods is reconciled against GSTR-2B. Job work challan movement is verified for Rule 45 compliance. Any ITC reversal obligations are identified and quantified.
Labour And Contractor Compliance
Factory payroll is audited for EPF, ESIC, and gratuity compliance. Contractor payments are verified for TDS deduction under Section 194C and contract labour registration compliance.
Software We Work With
Why manufacturing companies choose Cred Books for audit services
Manufacturing Cost Accounting Expertise
We understand standard costing, material consumption analysis, overhead absorption, and cost centre reporting for manufacturing businesses, which allows us to audit cost records accurately rather than superficially.
Cost Audit And CAS Compliance
We prepare cost audit reports under the Companies (Cost Records and Audit) Rules and ensure cost records comply with CAS standards applicable to your industry classification.
GST Job Work Specialists
GST job work compliance is a frequent area of non-compliance for manufacturers. Our team verifies challan procedures, return movement tracking, and Rule 45 compliance at the transaction level.
Multi-Plant And Multi-GSTIN Coverage
We handle audits for manufacturers with multiple plant locations and separate GST registrations, producing both plant-level and consolidated financial statements.
Year-Round Accounting Support
Our manufacturing accounting services maintain cost records, production accounts, and financial books in audit-ready condition throughout the year.
Fixed Scope And Committed Deadlines
Audit scope, cost audit requirements, and filing deadlines are agreed before engagement. The cost audit report is filed with MCA within the statutory deadline without exception.
How Our Manufacturing Audit Process Works
Plant And Operations Review
We review your products, production process, cost accounting system, GST registrations, and cost audit applicability before agreeing the audit scope and timeline.
Records And Data Collection
Production records, raw material registers, purchase ledgers, payroll records, bank statements, GST returns, and capital expenditure schedules are collected and organised.
Production And Inventory Verification
Raw material consumption, production output, WIP and finished goods inventory, and physical stock count results are reconciled at the plant level during fieldwork.
Management Discussion
Production variances, cost anomalies, and compliance gaps are discussed with plant management and finance before audit findings are finalised.
Report, Cost Audit, And Filing
Statutory audit report, cost audit report, tax audit form, and all GST annual return data are filed within the statutory deadlines for each compliance obligation.
Frequently Asked Questions
Get expert manufacturing audit services from Cred Books
Cost audits, statutory audits, GST compliance, production cost verification, and tax audits for manufacturing companies and factories across India. Talk to our team today.
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