Confirm merchandise in warehouses perform analytical

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Confirm merchandise in warehouses. Perform analytical procedures for inventories. Account for all client inventory count sheets. Be sure inventory items are properly classified, in good condition, and of proper quality. 13-8
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Chapter 13 - Auditing the Inventory Management Process 13-30 The substantive auditing procedures Kachelmeier may consider performing include: (a) Using the perpetual inventory file Recalculate the beginning and ending balances (prices x quantities), foot, and print out a report to be used to reconcile the totals with the general ledger or agree beginning balance with the prior year's working papers. Calculate the quantity balances as of the physical inventory date for comparison to the physical inventory file. Alternatively, update the physical inventory file for purchases and sales from January 6 to January 31, 2009, for comparison to the perpetual inventory at January 31, 2009. Select and print out a sample of items received and shipped for the periods (1) before and after January 5 and 31, 2009, for cutoff testing, (2) between January 5 and January 31, 2009, for vouching or analytical procedures, and (3) prior to January 5, 2009, for tests of details or analytical procedures. Compare quantities sold during the year to quantities on hand at year-end. Print out a report of items for which turnover is less than expected. Alternatively, calculate the number of days' sales in inventory for selected items. Select items noted as possibly unsalable or obsolete during the physical inventory observation and print out information about purchases and sales for further consideration. Recalculate the prices used to value the year-end FIFO inventory by matching prices and quantities to the most recent purchases. Select a sample of items for comparison to current sales prices. Identify and print out unusual transactions. These are transactions other than purchases or sales for the year, or physical inventory adjustments as of January 5, 2009. Recalculate the ending inventory by taking the beginning balances plus purchases, less sales, and print out the differences. Recalculate the cost of sales for selected items sold during the year. (b) Using the physical inventory and test count files Account for all inventory tag numbers used and print out a report of missing or duplicate numbers for follow-up. Search for tag numbers noted during the physical inventory observation as being voided or not used. Compare the physical inventory file to the file of test counts and print out a report of differences for auditor follow-up. Combine the quantities for each item appearing on more than one inventory tag number for comparison to the perpetual file. Compare the quantities on the file to the calculated quantity balances on the perpetual inventory file as of January 5, 2009. Alternatively, compare the physical inventory file updated to year end to the perpetual inventory file.
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  • Spring '12
  • Na
  • inventory management process

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