Do you believe that the normal review of purchase transactions by the auditors should include examination of receiving reports? Explain.
Answer to relevant QuestionsThe client’s cost accounting system is often an important part of the CPAs’ audit of the financial statements of a manufacturing company. For what purposes do the auditors consider the cost accounting system?When perpetual inventory records are maintained, is it necessary for a physical inventory to be taken at the balance sheet date? Explain.One of the problems faced by the auditors in their verification of inventory is the risk that slow-moving and obsolete items may be included in the goods on hand at the balance sheet date. In the event that such items are ...Described below are potential financial statement misstatements that are encountered by auditors.a. Inventory is understated because warehouse personnel overlooked several racks of parts in taking the physical inventory.b. ...Western Trading Company is a sole proprietorship engaged in the grain brokerage business. On December 31, 20X0, the entire grain inventory of the company was stored in outside bonded warehouses. The company’s procedure of ...
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