AUDIT - SESI 1

In terms of our topic today, why is inventory important?

• Without inventory, company can't generate revenue/cash

• Inventory is an expensive item

• Inventory is difficult to manage

Here is one of the objectives of inventory audit, is

• Ensure ownership of inventory

• Compile inventory reports

• Transfer ownership rights of inventory

In terms of our topic today, why does the issue of timing occur?

• Sometimes auditor can't perform audit on EOFY

• Timing will increase audit fee

• Timing needs more days to audit

In terms of timing, why can't auditor perform audit on EOFY?

• EOFY might be on Sunday

• EOFY might be on weekdays

• Auditor need more cost on EOFY

The procedure to obtain information about lost items :

• Stock take

• Evaluating stock cards

• Write off damaged stocks

The formula to recalculate inventory valuation is..

• Audit quantities of inventory items multiplied by audited purchase cost

• Audit quantities of inventory items multiplied by audited account payable

• Audit quantities of inventory items multiplied by audited total sales

When inventory with totally damaged is found, auditor would suggest client to perform..

• Write off

• Wrap up

• Run down

Generally, the impact of Un Adjusted obsolete inventory on profit is

• Profit increases

• Profit decreases

• No impact

In Purchase order steps, the question must be concerned for internal control is..

• Who approved Purchase Order?

• Where Purchase Order was Approved?

• How Purchase Order was Approved?

Limited access to warehouse is one of monitoring controls over inventory. It is..

• Warehouse security

• Warehouse maintenance

• Warehouse authority