When auditors want to use an auditee’s sales forecast for general familiarity with the production process or for evaluation of slow-moving inventory, what kind of work should be done on the forecast?
Answer to relevant QuestionsWhat items in an auditee’s production asset and amortization schedule can auditors use for designing audit procedures? Describe these audit procedures.In the audit of inventory, what is the purpose of the analytical procedure that compares gross profit margin by month for the last two fiscal periods? What are common errors and fraud in the payroll process? Which control characteristics are auditors looking for to prevent or detect these errors and fraud? What production documentation supports the valuation of manufactured finished goods inventory? Refer to the internal control questionnaire (Appendix 13A, Exhibit 13A–1), and assume the answer to each question is “no.” Prepare a table matching questions to errors that could occur because of the absence of the ...
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