Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Unique answer, please? Unique answer, please? Plus I can't read the writing of the already answered question. Required information The Control Environment as it Relates

Unique answer, please?image text in transcribed

Unique answer, please? Plus I can't read the writing of the already answered question.

Required information The Control Environment as it Relates to Inventory Read the case and answer the questions that follow. The control environment reflects a company's overall attitude, awareness, and actions of both management and the Board of Directors concerning the importance of control and how it's used in the company. Read the case. Then answer the questions based on it. BACKGROUND: The control environment reflects the company's attitude, awareness, and actions of management and the board concerning the Importance of control and how it is used. This is very relevant to an auditor's consideration of Inventories and should include: a) commitment to competence and HR policies and practices: b) Integrity and ethical values, and c) organizational structure and assignment of authortity and responsibility. Central Park Associates CPAs is conducting an audit of a U.S. manufacturing company. When reviewing the company's Inventory policy and physical Inventory policy, the auditors noted the following facts: 1) Physical Inventory will be conducted this year by temporary workers, at a wage cheaper for management than the "regularworkers: 2) Approvals for purchase orders with discounts are not required any longer: 3) The shop manager is no longer responsible for the physical Inventory. It is now the responsibility of the CFO: 4) The physical Inventory will be held four days after year end. Consider these facts in answering the following questions. 1. What aspect of the control environment is affected by the company's decision to hire temporary workers? 2 What aspect of the control environment is affected by the company's decision to no longer require approvals for purchase order discounts? 3. What aspect of the control environment is affected by the company's decision to no longer have the shop manager in charge of Inventory? 4. What aspect of the control environment is affected by the company's decision to hold the physical Inventory four days after year end

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

13th Edition

9780470374948, 470423684, 470374942, 978-0470423684

More Books

Students also viewed these Accounting questions