Following are audit procedures commonly performed in the inventory and warehousing cycle for a manufacturing company 1 (Click the icon to view the audit procedures) Requirements a. Identify whether each of the procedures is primarily a test of control or a substantive test b. State the purpose(s) of each of the procedures Requirement a. Identify whether each of the procedures is primarily a test of control or a substantive test Test of control or Substantive test? Test of contre Substantive test Substantive test Substantive test Substantive test Substantive test Test of control 2. 5. 6. 7. 8. Both a test of control and substantive test Requirement b. State the purpose(s) of each of the procedures Purpose of each procedure 2. 3. To ensure that additions recorded on finished goods perpetual records were recorded on books as completed production 4To ensure that all inventory represented by an inventory tag actually exists To ensure that no raw material was issued without proper approval. 9To idently slow-moving inventory that may need to be witten down 6. To make sure that proper controls exist and are being followed in the taking of the physical inventory 7To test client's final inventory compilation 8 To test the accuracy of the client's perpetual inventory records Following are audi procedures commonly performed in the inventory and warehousing cycle for a manufacturing company i (Click the icon to view the audit procedures) Requirements a. Identify whether each of the procedures is primarily a test of control or a substantive test b. State the purpose(s) of each of the procedures. Substantive test Substantive test Test of control 6. 8. Both a test of control and substantive test Requirement b. State the purpose(s) of each of the procedures. Purpose of each procedure 2. 3. 6. 8. 1. Read the client's physical inventory instructions and observe whether they are 2. Use audit software to compute inventory turnover by major product line and 3. Account for a sequence of inventory tags and trace each tag to the physical 4. Compare the client's count of physical inventory at an interim date with the 5. Trace the auditor's test counts recorded in the audit files to the final inventory 6. Compare the unit price on the inal inventory summary with vendors invoices being followed by those responsible for counting the inventory compare it to turnover in the prior year inventory to make sure it actually exists. perpetual inventory master file compilation and compare the tag number, description, and quantity Account for a sequence of raw material requisitions and examine each requisition for an authorized approval 8. Trace the recorded additions on the finished goods perpetual inventory master file to the records for completed production
