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 evidence, the reliabity of audit evidence defers with source is that ...

the reliabity of audit evidence defers with source is that true

Role of accountant, Role of Accountant The Accountant's Role Every ...

Role of Accountant The Accountant's Role Every year a lawyer who such handles client's money is used to created to the Law Society of US a report through a qualified accoun

Valuation - long term contracts, Valuation - Long Term Contracts The b...

Valuation - Long Term Contracts The basis of valuation should be cost plus attributable profit as benefits less foreseeable losses and progress payments both receivable and re

Discuss the value of external audit, The management of a newly incorporate...

The management of a newly incorporated company is unsure as to the need for an audit. Your services have been requested to explain to management the concept of auditing. Requir

Procedures that auditor adopts, Procedures that Auditor Adopts The audi...

Procedures that Auditor Adopts The auditor’s procedures will include: (1) Getting an understanding of the entity as a whole in order to see the accounting system in proper per

I dont understand, Ask qub) How might financial incentives in the form of c...

Ask qub) How might financial incentives in the form of client services unconsciously introduce auditor bias into the independent audit function? Give some specific real-life exampl

Operational auditing, phases of operational auditing report sample or templ...

phases of operational auditing report sample or template of companies operational audit report

management functions and the audit, Describe the management system within ...

Describe the management system within your case study business. Assess the risk of fraud in this business, and suggest methods for detection Management system in this ca

Comparison of the negative and positive methods, Comparison of the Negative...

Comparison of the Negative and Positive Methods Negative Method According to this method of circularisation, the customer is asked to communicate only when he does not ag

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