Page 103 - Demo

جميع الحقوق محفوظة ـ اإلعتداء عىل حق املؤلف 103 بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية7. Realizable value: Inventory items in the inventory listing are stated at realizable value where obsolete and damaged goods are excluded o Perform tests of lower of cost or market, selling price, and obsolescence o Test for obsolete inventory by inquiry of factory employees and management and alertness for items that are damaged, rust or dust- covered, or located in inappropriate places. 8. Detail tie-in: Inventory in the inventory listing schedule agrees with the physical inventory counts, and the total is correctly added and agrees with the general ledger o Trace Totals of each inventory type to general ledger In pricing raw materials in manufactured products, auditors must consider both the unit cost of the raw materials and the number of units required to manufacture a unit of output. The unit cost can be verified in the same manner as that used for other purchased inventory, by examining vendors’ invoices or perpetual inventory master files. Auditors must examine engineering specifications, inspect the finished product, or find a similar method to determine the number of units it takes to manufacture a product.Similarly, while testing direct labor, auditors must verify the hourly costs of direct labor and the number of hours it takes to manufacture a unit of output. Hourly labor costs can be verified by examining labor payroll or union contracts. Auditors can determine the number of hours needed to manufacture the product from engineering specifications or similar sources.