Lily, a new auditor in an electronics manufacturing company, is reviewing the appropriateness of the minimum quantity level of inventory established by a department. Which of the following would Lily be least likely to consider? Group of answer choices Area/size of the warehouse where the inventories are stored. Stockout costs, including lost customers. The potential for obsolescence of inventory items. Seasonal variations in forecasting inventory demand.

Q: Identify the type of audit evidence used for each of the audit procedure above. Explain TWO (2)…

A: Audit evidence are the evidence an auditor collects while doing procedures to reach on a conclusion.

Q: Your firm has recently been appointed as auditor to Danish, a private company that runs a chain of…

A:

Q: Following are audit procedures commonlyperformed in the inventory and warehousing cycle for a…

A: Audit procedure:   Audit procedures are used by auditors to determine the quality of financial…

Q: Which of the following would best explain an decrease in the company's inventory turnover? A. Due…

A: An inventory turnover is defined as the financial ratio, which used to represent how many times the…

Q: Question 2: Following are audit procedures commonly per- formed in the inventory and warehousing…

A: Auditing Auditing is one of the important things of the company to verify the total performance of…

Q: In conducting year-end inventory counts, your audit team is debating the impact of the client's…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: hich of the following would be a red flag that internal auditors should look at for the possibility…

A: Controller is responsible all accounting matters and he is responsible for the cash and payments.

Q: Cost of Goods Sold is increasing at rate that does not match sales or gross profit. While sales and…

A: The gross profit is calculated by deducting the cost f goods sold from the sales revenues of the…

Q: From the auditors’ point of view, inventory counts are more acceptable prior to the year-endwhena.…

A: Inventory Count:   The procedure of physically counting or verifying the inventory numbers and…

Q: d. Inappropriate Assignment of Labor Costs to Inventory A company having difficulty meeting profit…

A: Analytical procedures are the methods used by the auditors to find out the plausible differences…

Q: Ali is planning to implement an inventory control system where the store's ledger should show the…

A: The Inventory system that should be used for regular updation of store ledger account showing…

Q: As the lead accountant for a small company, you notice that inventory purchases from a certain…

A: An accountant is a person who works accounting duties such as account analysis, audit, or financial…

Q: According to your understanding as a financial auditor, can these conditions lead to material…

A: The material misstatements is the mismatch of the accounts balances and there are things which are…

Q: 2. What piece of information gained during the understanding of the inventory process would be LEAST…

A: Inventory Process The practice of controlling, storing, and keeping track of your inventory items is…

Q: he company XYZ suffers from numerous weaknesses in its internal control  system.  For each the below…

A: We are provided with various transactions on the basis of that, we need to check whether the…

Q: uestion 2: Following are audit procedures commonly per- formed in the inventory and warehousing…

A: Audit procedure: Audit procedures are used by auditors to determine the quality of financial…

Q: A master production schedule is most likely to be useful in O identifying erroneous journal entries.…

A: Solution: A master production schedule is the prepared by company to estimate its production for the…

Q: (please answer a, b)

A: Introduction Master file: A group of documents relating to one of the primary topics of an…

Q: ssume that 50% of a client's inventory is located in 2 warehouses subject to wall-to-wall counts at…

A: Verification of Inventory: It is the check of the accuracy of the inventory kept in the stores. it…

Q: What might be a valid reason for increase in inventory cost. Assuming that fraud is being committed,…

A: Inventory can be defined as the main product for the retail business entity. It is the main source…

Q: Lily, a new auditor in an electronics manufacturing company, is reviewing the appropriateness of the…

A: Purpose of audit By reviewing the minimum quantity level lily want to ensure that the department has…

Q: Comparing Inventory Systems Your company uses a perpetual inventory system to control its…

A: Perpetual inventory system records inventory flow in a real time basis with the help of software’s…

Q: Which of the following is a test of control relating to purchases? a. None of the options b. Give…

A: Test of controls refers to the audit procedure followed by the auditors while conducting an audit of…

Q: For companies that use a perpetual inventory system, all of the following are reasons for taking a…

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold on the…

Q: hen use checkmarks to identify which accounts are debited or credited. If none of these accounts is…

A: Identify which accounts are debited or credited. If none of these accounts is affected by the…

Q: Tracing for several days before and after year-end to recorded purchases is designed to test 1. the…

A: An auditor must check the authenticity of the transaction and it can be done by getting sufficient…

Q: AMI International is a large office products company. Headquartersmanagement imposed pressure on…

A: Computer-Assisted Audit Techniques (CAAT’s): The technique which assists an auditor to perform…

Q: You are evaluating audit results for current assets for your audit client Pepper Ltd. You take a…

A: Auditing can be defined as the verification and examination of the financial statement of the…

Q: For each of the following audit procedures, state which type of evidence-gathering technique is…

A: The question is related to the Auditing. Itbis related with the technique used to gathering…

Q: 1) Internal auditing is going to be performing an assurance engagement dealing with controls over…

A: Assurance Engagement Assurance engagement which was conducted by the internal auditors to get the…

Q: Which of the following statements is false? Explain Why?? a. It is the best practice to verify…

A: Intra company transfer represents the transfer of the inventory from one department to another…

Q: 208.Lily, an auditor for a major retail company, suspects that inventory fraud is occurring at three…

A: Persuasive evidence seems to be evidence which has the ability to convince or influence somebody to…

Q: price changes in the determine whether all price changes were approved by the senior accountan place…

A: Internal control refers to the process of adopting and implementing rules and policies to maintain…

Q: Need Help on the following question. Question #1 You have been hired by the CEO of a…

A: Inventory: The goods held by organization for using it captively for production of goods and…

Q: Because of increasing profits and inventory prices, the company changed from FIFO to LIFO inventory,…

A: An auditor should provide an unqualified opinion on the financial statements if he believes that the…

Q: the auditor decided to render analytical procedure in testing the reasonableness of the inventory…

A: The method of retail inventory refers to the accounting process which is used to estimate the…

Q: Which of the following procedures would best prevent or detect the theft of valuable items from an…

A: Definition:

Q: Dryden Company is an auto parts supplier. At the end of each month, the employee who maintains all…

A:

Q: State the points of concern in your report to management with respect to the control issues and…

A: Auditing work is done by the auditors on the company’s financial statements in which all the things…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.