96 does the system provide the ability where the

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Unformatted text preview: ish methods to capture and accumulate costs for work in process that account for repair or manufacturing performed by an independent third party, such as contractors or other government activities? The cost for work in process will be based on documented cost incurred. The process used to validate such work-in-process costs should be based, to the maximum extent possible, on reporting mechanisms used for contract management, project management, or other similar purposes. 96. Does the system provide the ability, where the standard cost method is being used to record costs for work in process, to record standard costs and actual costs for each inventory item, in order to support usage and cost variance analysis? Standard costs will include the anticipated amounts of material, labour, overhead, and other applicable factors. IT Audit Manual Volume III KD Reference 69 IT Audit Manual No 97. Item Does the system track actual and standard cost variances for materials (price and usage), labour (rate and efficiency), and overhead (actual and applied) when a standard cost method is used? 98. Does the system record reasons for significant deviations between standard and actual costs? 99. KD Reference Does the system provide capabilities to support adjustments of rates and dispositions of variances by performing periodic allocations? 100. Does the system match costs and revenues within the periods they were incurred or realized to identify gains or losses from sales/issual? 101. Does the system support analysis of operations on an annual basis to determine if revenues are sufficient to cover the costs of the entire inventory program? 102. Does the system provide sufficient transaction audit trails to support balances of inventory shown on the agency's general ledger and changes in those balances? 103. Does the system maintain the documentation supporting inventory transactions until it is audited for accuracy and approved by external auditors, but not for less than 3 years? Retention may be longer when...
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