SAP - Inventory - AP3 Substantive Audit ProgramInventory...

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AP-3 Substantive Audit Program-Inventory Balances Assertions Begin with the list of assertions below and add others you think appropriate. Then write  your audit program to test those assertions.  1. Inventory physically exists.  2. Inventory is owned by the company. 3. Inventory cost properly includes freight, discounts, taxes, etc.  4. Obsolete and unsalable goods have been written off or written down.  5. The inventory value does not exceed the applicable measure of market value.  6. Inventory out on consignment is properly recorded. 7. Inventory is a current asset.  8. Inventory pledged as collateral is disclosed.  Program Steps: 1.   Existence or occurrence All recorded inventory exists at the balance sheet date.  2.   Completeness All existing inventory has been counted and included in the inventory summary. 3.   Valuation or allocation Inventory quantities on the client’s perpetual records agree with items physically 
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