Your audit firm is the auditor of Speighstown Garden Centre, which operates a large centre that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Your audit firm is the auditor of Speighstown Garden Centre, which operates a large centre that sells plants, garden furniture (eg. outdoor benches) and garden equipment (e.g. lawn mowers). The inventory system is up-to- date; the records are well maintained and the year end quantities are used to determine the inventory value. The inventory count instructions are shown below: O The inventory count will supervised by the Financial Controller and will take place on 31 August 2012. The count will begin at 7am. The centre will be closed on the day of the count, but if any of the large customers like hotels require a rush order, they will be accommodated. One member of the Accounts Department will be assigned to each area along with a member of the garden staff. There will be computer produced sheets showing the quantities of each item from the system. The Financial Controller will distribute and collect back the forms at the end of the count. Where the amount observed is different to the amount on the sheet, it will be crossed out and the new amount written in pencil. (iii) The Financial Controller will then carry out test counts on five items in each area that has been counted. Where an error is found, the area will be re-counted. (iv) The quantity for any inventory that looks damaged or unsaleable should be crossed out and allotted a quantity of zero. Once all the sheets have been collected and test counts completed, the (v) Financial Controller will manually update the computerised system to reflect the counted quantities. After the system has been updated, the count sheets are discarded. Required: Identify and explain FIVE deficiencies in the inventory counting system that can be highlighted in the instructions from Speighstown Garden Centre. For each deficiency suggest how it could be overcome. (15 marks) Your audit firm is the auditor of Speighstown Garden Centre, which operates a large centre that sells plants, garden furniture (eg. outdoor benches) and garden equipment (e.g. lawn mowers). The inventory system is up-to- date; the records are well maintained and the year end quantities are used to determine the inventory value. The inventory count instructions are shown below: O The inventory count will supervised by the Financial Controller and will take place on 31 August 2012. The count will begin at 7am. The centre will be closed on the day of the count, but if any of the large customers like hotels require a rush order, they will be accommodated. One member of the Accounts Department will be assigned to each area along with a member of the garden staff. There will be computer produced sheets showing the quantities of each item from the system. The Financial Controller will distribute and collect back the forms at the end of the count. Where the amount observed is different to the amount on the sheet, it will be crossed out and the new amount written in pencil. (iii) The Financial Controller will then carry out test counts on five items in each area that has been counted. Where an error is found, the area will be re-counted. (iv) The quantity for any inventory that looks damaged or unsaleable should be crossed out and allotted a quantity of zero. Once all the sheets have been collected and test counts completed, the (v) Financial Controller will manually update the computerised system to reflect the counted quantities. After the system has been updated, the count sheets are discarded. Required: Identify and explain FIVE deficiencies in the inventory counting system that can be highlighted in the instructions from Speighstown Garden Centre. For each deficiency suggest how it could be overcome. (15 marks)
Expert Answer:
Answer rating: 100% (QA)
List of deficiency with the corresponding suggestions are as under Deficiency Suggestion for improvement Computer generated sheets are handed over to ... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date:
Students also viewed these accounting questions
-
Cost of Assets, Subsequent Book Values, and Balance Sheet Presentation The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery, during 2010: a. January...
-
This assignment is designed to help you build an annual operating budget, and to practice and/or improve your Excel skills. When totaling rows and columns in your budget, be sure to allow Excel to do...
-
Your firm is the auditor of Zhaos Charity for Pensioners. The charity was formed many years ago from a large gift by the Zhao family, the income from which is used to pay pensions to needy people....
-
The price of a stock is $55. A put option written on this stock with a strike price of $48.8 is quoted at $7.2. One option contracts covers 100 underlying shares. A trader enters a short position in...
-
Health care workers who use latex gloves with glove powder on a daily basis are particularly susceptible to developing a latex allergy. Symptoms of a latex allergy include conjunctivitis, hand...
-
Stefney Christian Date: 06/26/2023 To: From: New England Patriot Subject: Analysis of Aircraft Purchase vs. Chartering Decision I've done a thorough analysis of the decision to buy or charter a plane...
-
A large trapezoidal channel cut through stone has side slopes of 1:1 and a bed width of \(291 \mathrm{ft}\). Find the uniform flow in the channel when the flow depth is \(30.4 \mathrm{ft}\) and the...
-
PROJECT STEPS 1. Lizzy is the manager of Cozy Movies, a small local movie theater that has been in business for a very long time. She would like to keep track of the theater's sales and expenses from...
-
Head-First Company plans to sell 5,120 bicycle helmets at $74 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable...
-
Your firm is considering a new three-year project. You know that the unlevered cost of equity for firms with a similar risk as your target is 8%. At the end of the project, all available funds are...
-
Gandalf has a last request for you. The FX desk gave him the following quotes: USD/SGD spot rate 1.3310, MYR/SGD 0.2910, and USD/MYR 12-month forward quote +1,745 points. (b) Determine the USD/MYR...
-
Which of the following is not a reason to use encapsulation when designing a class? (Choose two.) A. Improve security. B. Increase concurrency and improve performance. C. Maintain class data...
-
What is the output of the Watch program? A. smart watch,watch B. watch,smart watch C. watch,watch D. The code does not compile. E. An exception is printed at runtime. F. None of the above. 1: class...
-
Given the following structure, which snippets of code return true? (Choose three.) A. new Coral() instanceof Friendly B. null instanceof Object C. new Coral() instanceof Object D. new Fish()...
-
Which is the first declaration to not compile? A. The CanBurrow interface does not compile. B. The HasHardShell interface does not compile. C. The Tortoise interface does not compile. D. The...
-
What is the output of the RightTriangle program? package shapes; A. rt B. irt C. The code does not compile due to line g1. D. The code does not compile due to line g2. E. The code does not compile...
-
How do ethical considerations factor into decision-making processes within complex business environments ?
-
Test whether the 5-year survival rate for breast cancer is significantly different between African American and Caucasian women who are younger than 50 years of age and have localized disease....
-
Your small business client, Phillips Computer Repair Shop, is experiencing financial difficulties and has to lay off one of its four employees in the accounting area. Phillip has asked you to...
-
Why do you think companies use revenue recognition as a primary means for inflating profits?
-
Your long- time client, Central Office Supply, has been rapidly expanding, and the board of directors is considering taking the company public. CEO Terry Puckett has heard that costs of operating a...
-
What are the differences between the light stall and the deep stall. Comment on the differences as regards the sectional lift and the moment coefficients.
-
At high angles of attack, the empirical formulae for the lift and moment coefficients for airfoils pitching at high frequencies are given in terms of maximum dynamic moment coefficient \(\left(C_{M}...
-
During dynamic stall, the drag coefficient is less for pitch-up than for pitch-down, whereas the lift coefficient is larger for pitch-up than for pitch-down. Why?
Study smarter with the SolutionInn App