AUDIT - SESI 3

The procedure to ensure that the stock in inventory list really exist, is

• Stock take

• Vouching sales invoice

• Analyse stock turn over

One of complications to perform stock take, is

• Inventory that's remote

• Inventory that's ready to sell

• High quantity of inventory

What should auditor perform to make sure that there's no fictitious inventory?

• Stoke take

• Arrange stock cards

• Recalculate inventory value

Here's how auditor understand internal control of client, except

• Internal control questionnaire

• Flowchart

• Ensure Mathematical Accuracy

To obtain information whether client has maintained inventory in secure location, the question is..

• Is there adequate protection from fire and water?

• Is physical inventory count conducted annually?

• Are receiving document matched to Purchase order?

Consignment is related to audit assertion

• Completeness

• Accuracy

• Right/ownership

Inventory that has been sold but not delivered yet, is related to audit Assertions

• Right/ownership

• Valuation

• Completeness

What is the effect of unadjusted obsolete inventory?

• Over statement of inventory

• Understatement of inventory

• No effect

The purpose of evaluating damaged & defective inventory is to ensure that:

• Is inventory recorded at realizable value

• Are all inventory transactions already recorded

• Is the inventory in the warehouse owned by the company

Here are the account related to inventory, except

• Account payable

• Account Receivable

• Prepaid insurance