Before the physical examination, the auditor obtains a copy of the client's inventory instructions and reviews them

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Before the physical examination, the auditor obtains a copy of the client's inventory instructions and reviews them with the controller. In obtaining an understanding of inventory procedures for a small manufacturing company, these deficiencies are identified: Shipping operations will not be completely halted during the physical examination, and there will be no independent verification of the original inventory count by a second counting team. Evaluate the importance of each of these deficiencies and state its effect on the auditor's observation of inventory.

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Auditing and Assurance services an integrated approach

ISBN: 978-0132575959

14th Edition

Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley

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