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Each of the following audit procedures is being used in the audit of Rockport Homes, Inc., to test the production control activities. Required:

Each of the following audit procedures is being used in the audit of Rockport Homes, Inc., to test the production control activities.

Required:

For each of these procedures identify (a) the strength of the internal control procedure being tested and (b) the internal accounting objectives being addressed.

Audit Procedure

(a) Strength

(b) Objective

  • 1.Select a sample of the documents prepared when raw materials are released from stores. Examine and tie the job number to the cost accounting records.

 

 

  • 2.Select a sample of the materials release documents in the production department file. Examine for foreman's signature or initials.

 

 

  • 3.Select a sample of the materials release documents in the production department file. Examine for issue date/material usage report date.

 

 

  • 4.Select a sample of the materials release documents in the production department file. Examine for name and item number of the material.

 

 

  • 5.Select a sample of the materials release documents in production department file. Examine for the clerk's signature or initials who issued the raw materials.

 

 

  • 6.Select a sample of the materials release documents in the production department file. Examine for matching material requisition in raw materials stores file, noting the date of requisition.

(Hooks 791-792)

Hooks, Karen L. Auditing and Assurance Services: Understanding the Integrated Audit. Wiley, 03/2010. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

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