Chapter 21 – Audit of the Inventory and Warehousing Cycle

Olga Quintana

Sujets

• management

Informations

• Publié par: Udrue
• Nombre de lectures: 479
• Langue: English

Extrait

Audit of the Inventory
and Warehousing Cycle
Chapter 21
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 1Learning Objective 1
Describe the business functions
and the related documents and
records in the inventory and
warehousing cycle.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 2Flow of Inventory and Costs
Raw Materials Work-in-Process
Beginning Raw Beginning Cost of
inventory materials inventory goods
used manufactured
Purchases Ending
inventory
Ending
inventory
Cost of
goods soldDirect Labor Finished Goods
Actual Applied Beginning Cost of
inventory goods sold
Manufacturing Overhead
Ending
Actual Applied inventory
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 3Learning Objective 2
Describe how e-commerce
affects inventory management.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 4How E-Commerce Affects
Inventory Management
The Internet enables companies to provide
complete descriptions of their inventory
on a real-time basis.
The use of the Internet and other e-commerce
applications may lead to financial reporting
risks if access to inventory databases and
systems is not adequately controlled.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 5Learning Objective 3
Explain the five parts of the audit
of the inventory and warehousing
cycle.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 6Functions in the Cycle
Process Receive Store Process Store Ship
purchase raw raw the finished finished
orders materials materials goods goods goods
Put Put Put
Flow Receive Ship
materials materials completed
of raw finished
in in goods in
Inventory materials goods
storage production storage
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 7Audit of Inventory
Part of audit Cycle in which tested
Acquire and record Acquisition and
raw materials, labor, payment plus
and overhead payroll and personnel
Internally transfer Inventory and
assets and costs warehousing
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 8Audit of Inventory
Part of audit Cycle in which tested
Ship goods and record Sales and collection
revenue and costs
Physically observe Inventory and
inventory warehousing
Price and compile Inventory and
inventory warehousing
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 9Learning Objective 4
Design and perform audit tests
of cost accounting.
©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 21 - 10