ACC/492, Auditing

Assignment Help:
An auditor is conducting an audit of
the financial statements of a wholesale cosmetics distributor with an inventory consisting
of thousands of individual items. The distributor keeps its inventory in its own distribution
center and two public warehouses. An inventory computer file is maintained on a computer
disk and at the end of each day the file is updated. Each record of the inventory file
contains the following data:
1. Item number
2. Location of item
3. Description of item
[792] PART 4 / AUDITING THE TRANSACTION CYCLES
4. Quantity on hand
5. Cost per item
6. Date of last purchase
7. Date of last sale
8. Quantity sold during year
The auditor is planning to observe the distributor’s physical count of inventories as of a
given date. The auditor will have available a computer tape of the data on the inventory
file on the date of the physical count and a general-purpose computer software package.
Required
The auditor is planning to perform inventory substantive tests. Identify the inventory tests
and describe how use of the general-purpose software package and the tape of the inventory
file data might be helpful to the auditor in performing such tests. (Hint: You may wish
to refer to Chapter 12 as well as this chapter in answering this question.) Organize your
answer as follows:
make 2 colums: in the first title it"INventory Stbtantive Test: in the column "observe the physical count, makeinng and recording test counts when possible
in hte scond colum, titile it: "Software Might Be Helpful For Substantive Tests" and in it" determine which iteams are to be test counted by selecting a random sample of a representative number of items from =the inventory file as of the date of the physical count"

Related Discussions:- ACC/492

Audit of the financial statements of e limited, An audit team is currently ...

An audit team is currently engaged in planning the audit of the financial statements of E Limited as at 30 June 2011. This was the first accounting period during which all the tran

Ias 20 accounting for government grants and disclosures, IAS 20 Accounting ...

IAS 20 Accounting for Government Grants and Disclosures IAS 20 Accounting for government grants and disclosures of government assistance The auditor needs to verify the

The use of engagement letters, The Use of Engagement Letters There is a...

The Use of Engagement Letters There is a contractual relationship among an accountant and his client. The accountant must therefore make sure that at the time he decided to exe

Audit, Why is studying Auditing different from studying other accounting to...

Why is studying Auditing different from studying other accounting topics?

Adudit, For each threat explain how it might be avoided.

For each threat explain how it might be avoided.

Joint auditor, advantage and disadvantage of joint auditor?

advantage and disadvantage of joint auditor?

Banks, Banks The Authoritative documents are: The Central Bank of...

Banks The Authoritative documents are: The Central Bank of Kenya Act, The Companies Act Cap 486. IAS 30 Disclosure in the Financial statements of Banks and Similar

Statutory audit of bank, what are the things we need to check in statutory ...

what are the things we need to check in statutory audit of bank?

The accounting system, The Accounting System ISA 400 Risk Assessment an...

The Accounting System ISA 400 Risk Assessment and Internal Control accounting system are the sequence of tasks and records of an entity by which transactions are procedure as a

Definition of auditing , Definition of Auditing According to Internatio...

Definition of Auditing According to International Standard on Auditing (ISA) objective and common principles governing an audit of financial statements, the purpose of a financ

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd