Describe how the separation of (1) authorization of production transactions, (2) recording of these transactions, and (3) physical custody of inventories can be specified among the production, inventory, and cost accounting departments.
Answer to relevant QuestionsWhat features of the cost accounting system would be expected to prevent the omission of recording materials used in production?Which population of documents or records would an auditor sample to determine whether (a) all authorized production was completed and placed in inventory or written off as scrap? and (b) finished goods inventory were ...What payroll documentation supports the validity and accuracy of payroll transactions? How can an auditor find out whether payroll control procedures were followed by company personnel?In a production situation similar to the Audit 13.1 case, what substantive audit work should be done on a sample of completed production orders (cost reports) recorded as cost of goods sold?
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