Please answer multichoice question in photo To reduce the risk of allowing an order to proceed when goods are not available or rejecting an order when goods are available, it is important to:Maintain accurate and timely periodic inventory records and periodically conduct physical inventory checks.Maintain accurate and timely perpetual inventory records and constantly conduct physical inventory checks.Maintain accurate and timely perpetual inventory records and periodically conduct physical inventory checks.Maintain accurate and timely periodic inventory records and constantly conduct physical inventory checks.

solution : The correct answer is Maintain accurate and timely perpetual inventory records and…

To reduce the risk of allowing an order to proceed when goods are not available or rejecting an order when goods are available, it is i O Maintain accurate and timely periodic inventory records and periodically conduct physical inventory checks. O Maintain accurate and timely perpetual inventory records and constantly conduct physical inventory checks. O Maintain accurate and timely perpetual inventory records and periodically conduct physical inventory checks. O Maintain accurate and timely periodic inventory records and constantly conduct physical inventory checks.

To reduce the risk of allowing an order to proceed when goods are not available or rejecting an order when goods are available, it is i O Maintain accurate and timely periodic inventory records and periodically conduct physical inventory checks. O Maintain accurate and timely perpetual inventory records and constantly conduct physical inventory checks. O Maintain accurate and timely perpetual inventory records and periodically conduct physical inventory checks. O Maintain accurate and timely periodic inventory records and constantly conduct physical inventory checks.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 19MCQ

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Similar questions

One reason for inventory is to prevent shutdowns. How does the JIT approach to inventory management deal with this potential problem?
Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information is in real-time. B. Inventory is automatically updated. C. It allows managers to make current decisions about purchases, stock, and sales. D. It is cost-prohibitive.
A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure? A. No changes would be made since the person paying the bills is different from the person ordering the inventory. B. The person in accounts payable should generate the purchase order. C. The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received. D. The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.
A JIT inventory management system maintains which of the following? a. Goods should be pushed through the system on a fixed schedule based on anticipated demand. b. Goods should be pulled through the system by present demand. c. Total inventory costs are minimized by balancing setup and carrying costs. d. Inventories are needed to avoid stock-out costs.
What is the major advantage of using a perpetual inventory system? a.) It provides efficient internal control over materials. b.) It avoids inventory shortages and overages. c.) It minimizes error in posting receipts and issues of materials. d.) It avoids losses due to theft.
1. What is the primary reason we perform physical inventory observations? A. To obtain sufficient appropriate audit evidence over the existence and condition of inventory to meet the objectives of the professional auditing standards B. To obtain sufficient appropriate audit evidence that inventory is recorded at the correct cost on the financial statements C. To provide assurance over the time it takes inventory to leave the warehouse and arrive at the customer D. To verify assumptions used in management's estimates regarding inventory reserves 2. What piece of information gained during the understanding of the inventory process would be LEAST relevant to the scoping of inventory locations? A. The company hired a new count supervisor for one of their largest locations B. Book to physical adjustments were material in the prior year for 2 locations C. Cycle count accuracy rates have been greater than management's targets in the prior year and current year to date D. WIP inventory takes…
Which of the following procedure is designed to prevent the company from ordering unnecessary items? A. Periodic counts of inventory and reconciliaton of counts to inventory records B. Using approved suppliers C. Requiring purchasing agents to disclose any financial investments in potential suppliers D. Approval of purchase requisitions
An example of a preventive control in the expenditure cycle is: A. Requiring management approval for large purchases B. Regular inventory counts C. Using firewalls and intrusion detection systems D. Conducting vendor audits.
The perpetual method of accounting for inventory: Is likely to be less expensive to maintain than a periodic inventory method Is not as helpful as a periodic method in providing management with timely reports about inventory quantities and costs Requires that a physical count of inventory be taken before the cost of goods sold can be determined with any reasonable degree of accuracy Allows management to better estimate inventory losses from pilferage than does a periodic inventory method
Why is it important to obtain shipping and receiving cutoff information during the inventory observation?
A serious exposure in the ordering process of the expenditure cycle is increased inventory costs. What is the related threat and applicable control procedure that address this exposure? A. mistakes in counting; do not inform receiving employees about quantity ordered B. paying for items not received; requiring that all supplier invoices be matched to supporting documents C. purchasing at inflated prices; review of purchase orders D. theft of inventory; periodic physical counts of inventory and reconciliation to recorded quantities E. mistakes in posting to accounts payable; reconciliation of detailed accounts payable to the general ledger control account
Provide examples of some procedures that can avoid inventory shrinkage.