Green CPA is comoleting audit procedures for the December 31, year 4, ausit of uBu co, a nni auditor from Green attended the physical inventory observation at year end. JBU Co. maintains a perpetual inventory system that is integrated with its general ledger. The auditor noted some issues that require further investigation while reviewing JBU's Inventory count sheets and warehouse location maps The auditor established the following information relating to the inventory count and product lines of JBU There was no product movement on the day of the count The loading dock is part of Warehouse A for the purposes of the count All product lines within each storage area have been identified on the warehouse maps. . The warehouse map is reflective of the warehouse on the day of the count Inventory values in the perpetual inventory isting are based on the most recent purchase price. Materiality for year-end audit: $8,000 . Performance materiality. $5,000 Email from controller From: controller@buco.com To: Auditor@cpafirm.com Date: January 11, year 5 Subject Re: Returns Auditor, Please see my response to your question inline below. Also, it should be noted that on closer look, there is an issue with the physical counts of the 5mm widgets. The perpetual records are correct. This has been validated by your associade. Laslly, it looks lke the perpetual inventory listing includes 750 units of SKU 267-1 that should moved out of the perpetual inventory system and into the consigned inventory account. Thanks Controller To controller@jbuco.com Date: January 10, year 5 Subject Returns Hi, Can you please tell me whether the tems in the returns area have been included in the count? yet have been processed in the perpetual inventory system Controllerj Yes, the counts are correct and returns have been included in the counts. However, they would not Thanks, Auditor Green CPA is comoleting audit procedures for the December 31, year 4, ausit of uBu co, a nni auditor from Green attended the physical inventory observation at year end. JBU Co. maintains a perpetual inventory system that is integrated with its general ledger. The auditor noted some issues that require further investigation while reviewing JBU's Inventory count sheets and warehouse location maps The auditor established the following information relating to the inventory count and product lines of JBU There was no product movement on the day of the count The loading dock is part of Warehouse A for the purposes of the count All product lines within each storage area have been identified on the warehouse maps. . The warehouse map is reflective of the warehouse on the day of the count Inventory values in the perpetual inventory isting are based on the most recent purchase price. Materiality for year-end audit: $8,000 . Performance materiality. $5,000 Email from controller From: controller@buco.com To: Auditor@cpafirm.com Date: January 11, year 5 Subject Re: Returns Auditor, Please see my response to your question inline below. Also, it should be noted that on closer look, there is an issue with the physical counts of the 5mm widgets. The perpetual records are correct. This has been validated by your associade. Laslly, it looks lke the perpetual inventory listing includes 750 units of SKU 267-1 that should moved out of the perpetual inventory system and into the consigned inventory account. Thanks Controller To controller@jbuco.com Date: January 10, year 5 Subject Returns Hi, Can you please tell me whether the tems in the returns area have been included in the count? yet have been processed in the perpetual inventory system Controllerj Yes, the counts are correct and returns have been included in the counts. However, they would not Thanks, Auditor
