Many auditors consider the substantiation of the figure for inventory to be a more difficult and challenging task than the verification of most other items on the balance sheet. List several specific factors that support this view.
Answer to relevant QuestionsWhat segregation of duties would you recommend to attain maximum internal control over purchasing activities in a manufacturing concern?For what purposes do the auditors make and record test counts of inventory quantities during their observation of the taking of the physical inventory? Discuss.The observation of a client’s physical inventory is a mandatory auditing procedure when possible for the auditors to carry out and when inventories are material.a. Why is the observation of physical inventory a mandatory ...Andy Watson, CPA, is a senior auditor on the audit of Carlson, Inc. Andy is reviewing the results of analytical procedures related to inventory. For results (a), (b), and (c), select the explanation that is most likely to be ...Hovington, CPA, knows that while audit objectives relating to inventories may be stated in terms of the assertions as presented in this chapter, they may also be subdivided and stated more specifically. He has chosen to do ...
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