AUDIT OF THE 20 INVENTORY AND WAREHOUSING CYCLE DONT IGNORE RED FLAGS Arens, Loebbecke, Auditing, &E @2000 by Prentice Hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 by Prentice Hall, Inc. 20 DON’T IGNORE RED FLAGS
Inventory is generally a major item on the balance sheet, and it is often the largest item making up the accounts included in working capital. Arens, Loebbecke, Auditing, &E @2000 by Prentice Hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 by Prentice Hall, Inc. Inventory is generally a major item on the balance sheet, and it is often the largest item making up the accounts included in working capital
The inventory is in different locations, which makes physical control and counting difficult. ■■■ ■■■■ ■■■■ ■■■■■ ■■■ ■■■ ■■■■ ■■■ ■■ ■■■■ ■■■ ■■■ ■■■ ■ ■■ ■■ ■■ ■■■■■■■■■■■ ■■■国■■■■■■■■ Arens, Loebbecke, Auditing, &E @2000 by Prentice Hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 by Prentice Hall, Inc. The inventory is in different locations, which makes physical control and counting difficult
BUSINESS FUNCTIONS IN THE CYCLE AND RELATED DOCUMENTS AND RECORDS Process purchase Orders Receive raw materials Store raw materials Process the goods Ship finished goods Perpetual Inventory Master Files Arens, Loebbecke, Auditing, &E @2000 by Prentice Hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 by Prentice Hall, Inc. BUSINESS FUNCTIONS IN THE CYCLE AND RELATED DOCUMENTS AND RECORDS Process Purchase Orders Receive Raw Materials Store Raw Materials Process the Goods Ship finished Goods Perpetual Inventory Master Files
PARTS OF THE AUDIT OF INVENTORY raster Acquire and Ship goods Assets Record raw and MaterialS, Ind Record Costs Labor and Revenue Overhead and Costs Physically Price and Observe Compile Inventory Inventory Arens, Loebbecke, Auditing, &E @2000 by Prentice Hall. Inc
Arens, Loebbecke; Auditing, 8/E ©2000 by Prentice Hall, Inc. PARTS OF THE AUDIT OF INVENTORY Acquire and Record Raw Materials, Labor, and Overhead Transfer Assets and Costs Ship Goods and Record Revenue and Costs Physically Observe Inventory Price and Compile Inventory