what are the audit asssertions related to inventory?

Q: How is the cost of ending inventory determined when pools are used?

A: A LIFO inventory pool is a method under which the individual units having same physical similarities…

Q: How might an auditor use a client’s sales forecast for general familiarity with the production cycle…

A: Production Cycle:   The process that accounts the conversion of raw materials to work-in-progress…

Q: What is a LIFO inventory pool?

A: Definition: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So,…

Q: What is the concept of material inventory error?

A: Raw materials inventory: Raw material inventories are the primary materials which are used in the…

Q: An auditor most likely would analyze inventory turnover rates to obtain evidence concerning…

A: Inventory turnover rate is the rate which shows how many times a company has sold and replaced it's…

Q: What are characteristics of the perpetual inventory system?

A: Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains…

Q: what is FIFO inventory method?

A: FIFO inventory method is one of the methods of calculation of value of ending Inventory and cost of…

Q: In the audit of inventory the auditor must perform important procedures prior to the actual…

A: Audit of inventory refers to the cross-verification of inventory physically present with the…

Q: What document intiates the sales process

A: Answer: Sales order procedures involves accepting a customer order and processing it, filling the…

Q: What are the valuing inventories?

A: Cost:   It is the economic value incurred by an organization to manufacture a product or to render a…

Q: What is inventory blanket lien?

A: Lien: Lien is a lawful right in contradiction of assets that are usually utilized as security to…

Q: What are the requirements for referencing a Component Auditor in the Audit Report?

A: Definition:   Component auditor: The component auditor performs the audit of the component of the…

Q: What are the different risks associated in the accounting of inventories?

A: Answer: Inventories are the current assets of the company which are realizable within 12 months from…

Q: Your audit client is under intense pressure to meet an earnings target. Which transaction assertion…

A: Assertions are the procedural claims that determine whether the financial statements are fairly…

Q: An auditor usually traces the details of the test counts made during the observation of physical…

A: An auditor traces the details of test counts of physical inventory to final inventory compilation in…

Q: Management and auditor are concerned about inventory control function in automated system? Why? How…

A: Inventory control function in automated system :                   In automated system, inventory is…

Q: How is inventory valuation made? Explain?

A: Stock or inventory are important yet inert resources lying with the organization at the end of an…

Q: Whose property are audit documentation (audit workpapers)? In what form must they be?

A: Auditing:                   It is a systematic verification of the books of accounts of an…

Q: discuss the process of auditing the following: • Inventories • Revenues • Segment Reporting

A: Auditing is defined as the on-site verification activity of a process or quality system, such as…

Q: Why is inherent risk for the existence of inventory an issue in the expenditure cycle audit?

A:

Q: What is the difference between audit and accounting

A: Audit and accounting are two important things in business. Two of them are equally important for…

Q: An auditor selected items for test counts while observing a client’s physical inventory. The auditor…

A: Management assertion: Management assertion refers to the claim made by the management assuring about…

Q: What is an upstream sale of inventory?

A: The upstream sale of inventory is an inter-company transaction between the parent company and the…

Q: what is the importance of each assertion in the audit of inventories

A: Audit of inventory has the following assertions which are enumerated as below:

Q: Explain Inventory Estimation Techniques.

A: Inventory Estimation Techniques:

Q: How is independent verification carried out in a manual revenue system, and give an example?

A: Verification is a process under which the confirmation is made by the auditor related to the actual…

Q: Explain the importance of an accurate valuation of inventories and list steps for the verification…

A: Inventory refers to the stock held by the company for the purpose of sale or the stock that is not…

Q: When evaluating inventory controls, an auditor would be least likely toa. Inspect documents.b. Make…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: Explain the importance of inventory management system.

A: Inventory management system refers to managing and tracking inventory.

Q: What is a downstream sale of inventory?

A: The downstream sale of inventory is an inter-company transaction between the parent company and its…

Q: An auditor selected items for test counts from the client’s warehouse during the physical inventory…

A: Definition: Management assertion: Management assertion refers to the claim made by the management…

Q: the auditor picks an item of inventory from the warehouse and determines whether it is included in…

A: Management assertions are the claims made by executives regarding certain aspects of a business. The…

Q: Entity-level controls can have a pervasive effect on the entity's ability to meet the control…

A: Controls to monitor results of the operations is an entity level control. Controls to monitor the…

Q: An inventory roll-forward is a kind of inventory management. Exactly what kind of forward-looking…

A: Introduction:      It is the systematic production of new reporting periods' accounts using (rolling…

Q: At the completion of an inventory observation, the controllerrequested the auditor to give him a…

A: Given case is: At the completion of an inventory observation, the controller requested the auditor…

Q: What questions should be asked after a returned item hasbeen counted and recorded?

A: Returned items are goods that are returned to the manufacturer or secondary retailers.

Q: How does inventory control deficiencies affect the development of audit procedures for inventories

A: Answer: The audit procedures are to be designed such that the total audit evidences can be…

Q: which six key factors commonly contribute to the risk of misstatement of the assertion of inventory?

A: The wrong information or incorrect accounting information represented in the financial statement is…