Page 96 - Auditinf Electronic System

6. Ship Finished Goods (related to Saled and Collection cycle)

Shipping completed goods is part of the sales and collection cycle. The actual
shipment of goods to customers in exchange for cash or other assets,

c) Shipping documents

The function 3, 4, 5: store raw material, process, Store finished goods are the essence
of inventory and warehouse cycle and require the auditor to perform additional
activities and audit procedures

Physically Price and
Observe Inventory Compile Inventory

Auditors must observe the client taking Costs used to value inventory must be

a physical inventory count to determine tested to determine whether the client

whether recorded inventory actually has

exists at the balance sheet date and is correctly followed an inventory method

correctly counted by the client. that is both in accordance with

Physical examination is an essential accounting

type of evidence used to verify the standards and consistent with previous

existence and count of inventory years.

Examples of key considerations that Must consider consistency of method

auditors should consider include the used, in calculating cost of purchased

inventory valuation method selected by and manufactured inventory. Whether

management, the potential for FIFO of W.A, and accurate application

inventory obsolescence, and the risk and the. ensure proper valuation of

that consignment inventory might be lower of cost or market. also allocating

intermingled with owned inventory. costs of overheads make sure proper

allocations are assigned.

Inventory Observation Assume that the client values an
Requirements: inventory item at $12.00 per unit for
1,000 units, using FIFO. When the

1. Be present at the time the client auditor examines the most recent
counts their inventory for invoices for acquisitions of that
determining year-end balance inventory item, she finds that the most
recent acquisition of the inventory item

in the year being audited was for 700

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‫جميع الحقوق محفوظة ـ الإعتداء على حق المؤلف بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية‬