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auditee maintains large inventories to facilitate sales. However, this increases the risk of obsolete inventory due to slow turnover. Assessing the value of obsolete inventory

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auditee maintains large inventories to facilitate sales. However, this increases the risk of obsolete inventory due to slow turnover. Assessing the value of obsolete inventory involves management judgment and increases the risk that inventory valuations will be overstated[ CITATION Cer20 \\ 1033 ]. Thus, I would recommend careful scrutiny of Southwest's inventory valuation allowance based on the lower of cost or market rule. The Transaction process- According to the available information, after a sales requisition is received as recorded by sales clerk, the Controller approves it. The approval is then taken to warehouse for the dispatch of goods either to the contractors or their representatives. The clerk of the warehouse dispatches the goods after printing a dispatch/delivery advice. The bookkeeper bills the client after getting the delivery advice from the warehouse clerk. Marco Appliance is exposed to risk since the clients can default to pay for good purchased on credit. Because sales are recorded after they are made, this would result in overstating revenues hence materials misstatement of financial statements. New customers' admission - The Controller is the only personnel who should set up new customers into the system. This causes bias. The Controller may admit his friends and relatives on credit terms. Some of them may not even be creditworthy. This would cause

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