Q.A manufacturing company produces electrical switches and wants to know whether the ₹42 per unit cost it has recorded for a particular switch model genuinely reflects the raw material, labour, and overhead actually consumed, or whether some overheads have been wrongly apportioned to this model. Which branch of auditing addresses this concern, and what would it verify?

This is squarely a cost-record-accuracy question, which is exactly what Cost Audit — not a financial audit — is designed to verify.

A financial audit checks the accounts as a whole, not per-unit cost buildup — only a cost audit examines cost apportionment at this level of detail.

Step 1 — Identify the nature of the concern. The company is not asking whether its overall financial statements are true and fair (a financial audit's job); it is asking a much narrower, technical question — whether the RECORDED COST of one specific product genuinely reflects what was actually consumed to make it, and whether shared/overhead costs have been fairly split (apportioned) across different product models.

Step 2 — Match this to the right branch. This is precisely what Cost Audit exists to verify: the accuracy of cost accounting records and their compliance with the organisation's cost accounting plan, including how joint/overhead costs are apportioned across products.

Step 3 — What would the cost audit actually check? It would independently trace the raw material and labour actually consumed for this switch model, verify that the overhead apportionment method used (e.g. machine-hours, labour-hours) has been applied consistently and correctly to arrive at the ₹42 figure, and confirm the whole computation follows the company's stated cost accounting plan/standards.

Step 4 — Value beyond mere verification. If the cost audit finds the apportionment was wrong, it directly helps the company fix a more accurate, fair selling price for this switch model and identify whether some other product has been silently over- or under-costed as a result.