Page 99 - Demo

جميع الحقوق محفوظة ـ اإلعتداء عىل حق املؤلف 99 بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية2. Observe the client’s counting procedure3. Make inquiries of client personnel about their counting procedure4. Make their own independent tests of the physical count.5. Confirm with custodian of our inventory held consignment inother locationsunits at $12.00 per unit, and the immediately preceding acquisition was for 600 units at $11.30 per unit. Using correct FIFO valuation techniques, the inventory items should be included at $11,790 (700 units at $12 and 300 at $11.30). The client’s calculations overstates inventory by $210.00 ($12,000 – $11,790). Assuming the client makes this same error on many inventory items, the misstatement amount can be material.Second: Designing tests of controls and substantive tests of transactions for Inventory and warehouse1. Understand internal control of: a) controls over Physical count: controls ensure physical observation requirements are met by the client b) Controls over the related costs: consistency in using costing methods over time, estimation of cost of obsolete inventory, 2. Assess planned controls risk uses the information obtained in understanding internal control to assess existing control determine any control deficiency and identify control risk. The auditor has to assess effectiveness of key controls: The key control activities Includea. Physical controls over inventory: including proper client instructions for the physical count, indicating timing of physical count.b. independent reconciliations: of the physical counts with perpetual inventory master files and independent internal verification of the counts by other client personnel.c. authorization of Physical count: ensure supervision by responsible company personneld. Documentation: Documents and records for transferring inventory must be prenumbered and stamped and properly stored including vendors invoice for raw material