Consumer Electronics

Consumer Electronics - companys electrical engineering...

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ADMS 4551 Session 10 - Inventory Consumer Electronics Your are the audit senior for the year end audit of Consumer Electronics Inc., a manufacturer and distributor of small appliances. You have been assigned to inventory and the related accounts, so far you have noted the following: 1. During the inventory observation, you noticed several trucks loaded with finished goods parted at the shipping dock. The contents of the trucks were excluded from the physical inventory. 2. The finished goods inventory included high volumes of several products, and many of their cartons were old and covered in dust. You questioned the plant manager about this and he told you that there was no problem since “all of the goods will eventually be sold although some price incentives may be necessary.” 3. While reviewing the complex calculations used to develop the unit production costs of items in finished goods, you noted that the costs of the
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Unformatted text preview: companys electrical engineering department had been treated as period expenses in the previous years but were included in manufacturing overhead in the current year. 4. The company installed a new perpetual inventory system during the year. You noted that several of the companys recorded year-end quantities differed from the actual physical inventory counts. In part because of these problems, the company took a complete physical inventory at year end. Required: For each of your findings indicate the key assertion, the particular risk and what type of additional audit procedures you would use to obtain sufficient and appropriate evidence. Complete the chart on the following page. ADMS 4551 Session 10 - Inventory Finding Assertion Risk Procedures 1 2 3 4 ADMS 4551 Session 10 - Inventory...
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Consumer Electronics - companys electrical engineering...

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