ABC Company Internal Audit Reference: abc ENGAGEMENT PROGRAM GUIDE ABC Co. EPG[A)-Inventory Engagement Title: Engagement Type: Inventory of Apparel Stocks Assurance Prepared by Approved by: Effectivity: Management Internal ABC Company Internal ABC Company BOD FY 2018 Control Department (MICD) Audit Objectives: 1- To check for existence and completeness of listed apparel stocks as per Warehouse Section's monitoring records. To ascertain equality of stock on hand [physical count against the computer system] as of stated cut-off date. The entity has legal title or similar rights of ownership to the inventory Obsolete, slow-moving, and overstock inventory is monitored and promptly identified, and valuation allowances are recorded when necessary. Costs are assigned to inventory in accordance with the stated valuation method 2.In consideration of specified cut-off date, compute for Adjusted Inventory Count [Physical count + - transactions up/ down to the agreed cut-off date]. 3.In the MS Excel format using the formula in Procedure 2, deduct the Adjusted Inventory Count from the computer system's Stock on Hand. If there are variances: analysis of ledgers of concerned inventories should be performed to identify variance factors summarize recommended adjustments 4. Tabulate the results of physical counting to an MS Excel file. Third Phase: Data Analysis 1. Perform test of quantity analysis 2. Perform test of pricing analysis 3. Perform lower of cost or net realizable value (NRV) test 4. Submit the working papers to the MICD Head for proper disposition. Use the template, as shown below, in preparing the audit program for the audit of inventories of ABC Company. PROCEDURES WP/WE Performed Dat Reviewed Date Ref by by Apparel inventory is being done with other parties-of-interest Le Costing, General Accounting (GA) and Marketing. Nevertheless, the Internal Audit can solely initiate the activity if required by management /Warehouse-in-Charge is the lead in counting the apparel stocks, "Internal Audit is responsible for providing the Inventory Stocks Count Sheet for all the inventory participants. First Phase: Counting of Physical Stocks