Question: Each of the following control test procedures may be performed

Each of the following control test procedures may be performed during the audit of the controls in the production process.

For each procedure (a) identify the internal control procedure (strength) being tested, and (b) identify the internal control objective(s) being addressed.
1. Balance and reconcile detail production cost sheets to the work-in-process inventory control account.
2. Scan closed production cost sheets for missing numbers in the sequence.
3. Vouch a sample of open and closed production cost sheet entries to (a) labour reports and (b) issue slips and materials-used reports.
4. Locate the material issue forms. Are they pre-numbered? Kept in a secure location? Available to unauthorized persons?
5. Select several summary journal entries in the work-in-process inventory: (a) vouch to weekly labour and material reports and to production cost sheets, and (b) trace to control account.
6. Select a sample of the material issue slips in the production department file. Examine for the following:
a. Issue date/materials-used report date
b. Production order number
c. Supervisor’s signature or initials
d. Name and number of material
e. Raw material stores clerk’s signature or initials
f. Matching material requisition in raw material stores file, noting date of requisition
7. Determine by enquiry and inspection if cost clerks review dates on report of units completed for accounting in the proper period.

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  • CreatedJanuary 09, 2015
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