(4) Test une il pleuged or assigned Tuullion facility UNUI Standard overhead rates nimum. ly matched ecords. details of sponse. yventory. rocedure 11-1 (OBJECTIVES 2 band in questionn the inventory and gronse to a a sential deficie DISCUSSION QUESTIONS AND PROBLEMS IVES 21-1, 21-3,21-5,21-6, 21-7) Items 1 through 8 are selected questions typically ionnaires used by auditors to obtain an understanding of internal control ry and warehousing cycle. In using the questionnaire for a client, a "yes" re- a question indicates a possible internal control, whereas a "no" indicates a po- ventory? 1. Does the rece for the numbers i I count, quantity of materials? the receiving department prepare prenumbered receiving reports and account numbers periodically for all inventory received, showing the description and 2. Is a detailed pa inventory? detailed perpetual inventory master file maintained for raw materials re all shipments to customers authorized by prenumbered shipping documents? all inventory stored under the control of an inventory custodian in areas where ac- cess is limited? overhead? Are standard cost records used for raw materials, direct labor, and manufacturing Is there a stated policy with specific criteria for writing off obsolete or slow-moving goods? 7. Are physical inventory counts made by someone other than storekeepers and those responsible for maintaining the perpetual inventory master file? 8. Is the clerical accuracy of the final inventory compilation checked by a person inde- pendent of those responsible for preparing it? For each of the preceding questions, state the purpose of the internal control. D. For each internal control. list a test of control to test its effectiveness. TION Required s in ose JFor each of the preceding questions, identify the nature of the potential financial misstatement(s) if the control is not in effect. jr_----1C.L. natanti 1.---.. (4) Test une il pleuged or assigned Tuullion facility UNUI Standard overhead rates nimum. ly matched ecords. details of sponse. yventory. rocedure 11-1 (OBJECTIVES 2 band in questionn the inventory and gronse to a a sential deficie DISCUSSION QUESTIONS AND PROBLEMS IVES 21-1, 21-3,21-5,21-6, 21-7) Items 1 through 8 are selected questions typically ionnaires used by auditors to obtain an understanding of internal control ry and warehousing cycle. In using the questionnaire for a client, a "yes" re- a question indicates a possible internal control, whereas a "no" indicates a po- ventory? 1. Does the rece for the numbers i I count, quantity of materials? the receiving department prepare prenumbered receiving reports and account numbers periodically for all inventory received, showing the description and 2. Is a detailed pa inventory? detailed perpetual inventory master file maintained for raw materials re all shipments to customers authorized by prenumbered shipping documents? all inventory stored under the control of an inventory custodian in areas where ac- cess is limited? overhead? Are standard cost records used for raw materials, direct labor, and manufacturing Is there a stated policy with specific criteria for writing off obsolete or slow-moving goods? 7. Are physical inventory counts made by someone other than storekeepers and those responsible for maintaining the perpetual inventory master file? 8. Is the clerical accuracy of the final inventory compilation checked by a person inde- pendent of those responsible for preparing it? For each of the preceding questions, state the purpose of the internal control. D. For each internal control. list a test of control to test its effectiveness. TION Required s in ose JFor each of the preceding questions, identify the nature of the potential financial misstatement(s) if the control is not in effect. jr_----1C.L. natanti 1
