Question

Assignment #5

Accounting 403

Name ________________________________

You are on the audit team of Apollo Shoes Inc. for the year ending December 31, 2015.

Your manager has asked you to plan the audit of Inventory

Instructions:

Prepare an audit plan for inventory to follow for Apollo Shoes Inc.

Also prepare a list of instructions Apollo Shoes Inc. should follow while

performing inventory

Answer 1

Solution:

Audit / Review Plan for Inventory:

• Cut off examination which incorporates testing of last few accepting and transporting exchanges just before physical tally.
• Watch the physical stock check.
• Accommodate the stock check to general record.
• Test the high esteem things
• Test the blunder inclined things
• Test stock in travel
• Test thing costs
• Test that stock is esteemed at lower of expense or market cost.
• Survey of procurement records to check that stock in distribution center is really possessed by the organization
• Confirm the segment of expenses incorporates into the estimation of stock is right, for example, material cost, work cost and overheads
• Confirmation of appropriate bookkeeping of stock according to the pertinent strategy connected by the organization, for example, LIFO, FIFO, Weighted normal technique and so on.