INVENTORY AND WAREHOUSING CYCLE

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CHAPTER 19

• INVENTORY AND WAREHOUSING CYCLE

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FUNCTIONS IN CYCLE

• PROCESS PURCHASE ORDERS
• RECEIVE NEW MATERIALS
• STORE RAW MATERIALS
• PROCESS GOODS
• ADEQUATE COST ACCOUNTING SYSTEM
• STORE FINISHED GOODS
• SHIP FINISHED GOODS
• PERPETUAL INVENTORY RECORDS

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PARTS OF THE AUDIT OF INVENTORIES

• ACQUIRE, RECORD RAW MATERIALS, LABOR, AND
  OVERHEAD
• PURCHASING CYCLE
• PAYROLL CYCLE
• TRANSFER INVENTORY AND COSTS
• SHIP GOODS AND RECORD
• SALES AND COLLECTION CYCLE
• PHYSICALLY OBSERVE INVENTORIES
• PRICE AND COMPILE INVENTORY

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AUDIT OF INVENTORIES

• AUDIT OF COST ACCOUNTING
• COST ACCOUNTING CONTROLS
• PHYSICAL CONTROLS OVER INVENTORY
• CONTROLS OVER COSTS
• PERPETUAL INVENTORY RECORDS
• TESTS OF COST ACCOUNTING
• PHYSICAL CONTROLS
• OBSERVATION AND INQUIRY
• DOCUMENTS AND RECORDS FOR TRANSFERS
• PERPETUAL INVENTORY FILES
• UNIT COST RECORDS

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• ANALYTICAL PROCEDURES
• IMPORTANT TO AUDIT OF INVENTORY
• TESTS OF DETAILS OF BALANCES
• METHODOLOGY ON PAGE 650
• PHYSICAL OBSERVATION
• REQUIRED BY SAS 1 UNLESS
• CLIENT CONTROLS FOR OBSERVATION
• INSTRUCTIONS
• PERSONNEL
• TAGS
• AUDIT DECISIONS
• TIMING
• SAMPLE SIZE
• SELECTION OF ITEMS
• PHYSICAL OBSERVATION TESTS BY AUDITOR

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• AUDIT PRICING AND COMPILATION
• PRICING AND COMPILATION CONTROLS
• STANDARD COST RECORDS
• ADEQUATE DOCUMENTS FOR COUNT
• INTERNAL VERIFICATION
• PRICING AND COMPILATION PROCEDURES
• BALANCE RELATED OBJECTIVES
• INVENTORY AGREES WITH PHYSICAL COUNTS
• INVENTORY EXISTS
• COMPLETENESS
• ACCURACY
• CLASSIFICATION
• RIGHTS
• PRESENTATION AND DISCLOSURE
• VALUATION OF INVENTORY

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• INTEGRATION OF TESTS
• ACQUISITION AND PAYMENT CYCLE
• PAYROLL AND PERSONNEL CYCLE
• SALES AND COLLECTION CYCLE
• COST ACCOUNTING
• PHYSICAL INVENTORY
• OBSERVATION
• PRICING
• COMPILATION