ELI5: Explain Like I'm 5

cost auditing

Hey there young one! So, have you ever gone to the store with your parents and they compare the prices of different brands before buying something? That's kind of like cost auditing!

Cost auditing is when someone checks to make sure that a company is spending their money wisely and not wasting any of it. This is really important because companies want to make sure they are making as much profit (money left over after they pay for everything) as possible.

Imagine that you have a lemonade stand and you need to buy cups, lemon juice and sugar to make your lemonade. You want to make sure that you're not spending too much money on these items, so you ask your parents to help you check prices at different stores before you buy anything. This way, you can make sure you're getting the best deal and not overspending.

That's similar to what a cost auditor does for a big company! They check to make sure the company is getting the best deals on things they need like equipment, raw materials, and other supplies by comparing prices from different vendors. They also make sure that the company isn't wasting any money on unnecessary expenses. By doing all of this, they help the company save money and make more profit.

So, just like how you want to make sure you get the best deal for your lemonade stand, a cost auditor helps a company save money by making sure they get the best deals too. Cool, right?
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