For each audit procedure commonly performed in the inventory and distribution cycle for a manufacturing company, identify
Question:
For each audit procedure commonly performed in the inventory and distribution cycle for a manufacturing company, identify whether each of the procedures is primarily a test of controls or a substantive test.
Transcribed Image Text:
Procedure Read the client's physical inventory instructions and observe whether they are being followed by those responsible for counting the inventory. Account for a sequence of inventory tags and trace each tag to the physical inventory to make sure it actually exists. Compare the client's count of physical inventory at an interim date with the perpetual inventory master file. Trace the auditor's test counts recorded in the audit files to the final inventory compilation and compare the tag number, description, and quantity. Compare the unit price on the final inventory summary with vendors' invoices. Account for a sequence of raw material requisitions and examine each requisition for an authorized approval. Trace the recorded additions on the finished goods perpetual inventory master file to the records for completed production. Test of Controls/Substantive Test
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 90% (11 reviews)
Read the clients physical inventory instructions and observe whether they are being followed by thos...View the full answer
Answered By
Shaira grace
I have experience of more than ten years in handing academic tasks and assisting students to handle academic challenges. My level of education and expertise allows me communicate eloquently with clients and therefore understanding their nature and solving it successfully.
5.00+
4+ Reviews
10+ Question Solved
Related Book For
Auditing The Art And Science Of Assurance Engagements
ISBN: 9780136692089
15th Canadian Edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones
Question Posted:
Students also viewed these Business questions
-
Following are audit procedures commonly performed in the inventory and warehousing cycle for a manufacturing company: 1. Read the client's physical inventory instructions and observe whether they are...
-
The following audit procedures (labeled 1. through 8. below) are found in audit programs addressing the acquisition and payment cycle. For each audit procedure described: a. Identify the objective of...
-
The following are audit procedures from different transactioncycles: 1. Examine sales invoices for evidence of internal verification ofprices, quantities, and extensions. 2. Select items from the...
-
Russ Wyant owned Humble Ranch in Perkins County, South Dakota. Edward Humble, whose parents had previously owned the ranch, was Wyants uncle. Humble held a two-year option to buy the ranch. The...
-
Shirley Sixpack is in the habit of drinking beer each evening while watching The Best of Bowlerama on TV. She has a strong thumb and a big refrigerator, so she doesnt care about the size of the cans...
-
The Mitchem Marble Company has a target current ratio of 2.0 but has experienced some difficulties financing its expanding sales in the past few months. At present, the firm has a current ratio of...
-
Clearly, this phase is very dependent upon the people on your team. APF gives team members great discretion in completing their work. If you were managing an APF project, how would you balance your...
-
Howie Long has just learned he has won a $500,000 prize in the lottery. The lottery has given him two options for receiving the payments: (1) If Howie takes all the money today, the state and federal...
-
show process Confirm that the below limit meets the conditions to apply I'Hopital's Flute and then solve the limit. Be sure to address these conditions in your expianation. Enter an exact numeric...
-
Rodeo & Blue Inc (RBI) has been a remarkable success story over the past four years. Starting from a small basement operation, it has quickly grown to a worldwide leader in the music industry. It is...
-
Big Tasty Bird Inc. (BTB) is a turkey farm. BTB year-end is September 30, 2020. It takes about four to six months to raise a turkey from the time the chicks hatch from their eggs. A full-grown and...
-
On December 31, 2020, Best Cement Inc., a cement wholesaler, conducted its annual year-end inventory count. Best Cement stores all of its cement in large storage silos (very tall cylinder-shaped...
-
Entities can have three types of relationships, one-to-one, one-to-many and many-to-many. Define each type of relationship. Draw ER diagrams to illustrate each type of relationship.
-
Answer the following questions according to the given Ag-Cu system. 1200 T (C) 1000- 800 600- 400 200- 0 Ag (Ag) 10 Liquid 20 30 40 50 60 Mass % Cu 70 (Cu) 80 90 100 Cu C, melting temperature of...
-
Babbitt Ranches Case Questions 1. Why might the goals and operations of a family business be different than those of a publicly traded company? Provide specific examples from the case that support...
-
"You have to decide whether or not to invest in the following 3 projects. The cost of capital is 6%. Project A requires an initial investment of $1,000,000 now. The project will generate cash flows...
-
How do organisms navigate complex environments and coordinate behaviors, and what are the neural and sensory mechanisms underlying these adaptive responses ?
-
Restricting permission to work for asylum seekers 'ensures a clear distinction between economic migration and asylum that discourages those who do not need protection from claiming asylum to benefit...
-
Bent Tree Coffee purchases green coffee beans from various suppliers and then roasts the coffee beans in its roasting facility. The roasted beans are sold in 20-pound cases to grocery stores and...
-
What is your assessment of the negotiations process, given what you have studied? What are your recommendations for Mr. Reed? You must justify your conclusions
-
Explain how the calculation of the gross margin percentage and the ratio of accounts receivable to sales, and their comparison to that of previous years, are related to the confirmation of accounts...
-
Distinguish between a combined audit approach and a substantive audit approach. Give one example of when each might be appropriate for the acquisition and payment cycle.
-
Assume that the clients internal controls over the recording and classifying of capital asset additions are considered weak because the individual responsible for recording new acquisitions has...
-
Rra Madila has notified you that he is using the Last In First Out to value inventory. For the month of January 2 0 2 4 , he has provided you with the following information relating to one of his...
-
Answer only when know.. 5 0 6 .
-
Members of the board of directors of security team
Study smarter with the SolutionInn App