Question 3

1. Questions 1 through 8 are internal control questionnaires used for inventory and warehousing cycle.

1. Are all shipments documents to authorized customers pre-numbered?

2. Are standard cost records used for raw materials, direct labor, and manufacturing overhead?

3. Is there a stated policy with specific criteria for writing off obsolete or slow-moving goods?

4. Does a detailed perpetual inventory master file use for raw materials inventory?

5. Are physical inventory counts made by someone other than storekeepers and those responsible for maintaining the perpetual inventory master file?

6. Does a person independent of those responsible for preparing the final inventory list check its accuracy?

7. Does the receiving department prepare pre-numbered receiving reports and account for the numbers periodically for all inventory received, showing the description art quantity of materials?

8. Is all inventory stored under the control of an inventory custodian in areas where access is limited?

Required

Select any Five (5) out of the above eight (8) internal control questions, and

1. Identify the nature of the potential financial misstatements 5 marks

Recommend a substantive test for transaction to detect the material misstatement identified. 10 marks

could anyone help me in this?