Audit Field Standards: Audit of Inventory Session 11
Learning Objectives Understanding Audit Field Standards of Audit of Inventory Understanding Internal Control of Inventory Understanding Audit Objectives of Inventory Being able to design Audit Procedures of Inventory Understanding of Documents (evidence) to support the records of Inventory Audit Evidence of Purchasing and Inventory Confirmation about Inventory Some Frauds involving Inventory Examples of Audit Findings of Inventory
SPAP – SA Seksi 331 SA 331 – 03 sd 07 – Pengamatan thd Penghitungan Fisik Sediaan SA 331 – 08 – Sediaan yang berada di Gudang Umum (Tugas: Mahasiswa membuat resume dan mempresentasikannya dengan beberapa kemungkinan penyimpangan yang mungkin terjadi)
The Internal Control Objectives of Inventory Inventory purchased are needed Inventory is stored safely in good storage/ warehouse (warehouse is physically good) Inventory is prevented from theft (warehouse is a closed area for unauthorized persons) and breaking down Inventory is stacked manageably and easy to be taken out. Inventory is maintained in a sufficient balance. Inventory is classified accordingly
Activities Need to be Examined Requesting of purchase activity Receiving activity (The way of receive) Moving out activity Storing/stacking activity Packing activity
Audit Procedures of Inventory are the steps to be done sequentially to achieve the audit objectives
Audit Objectives of Inventory Transaction Audit Objectives Occurrence Completeness Accuracy Cut off Classification Balance Audit Objectives Existence Right and Obligation Valuation and Allocation
Audit Objectives of Inventory Disclosure Objectives Occurrence Right and Obligation Completeness Classification and Understandability Accuracy and Valuation (Boynton, Modern Auditing 8 edition)
Documents (evidences) to support the records of Inventory PR (Purchase Requisition) PQ (Purchase for Quotation Bid Evaluation Contract or Agreement Letter PO (Purchase Order) RR (Receiving Report) DO (Delivery Order of supplier) Invoice of supplier Purchase Return Document Good Using Document
Audit Evidence of Inventory Inquiries of the client Documentation Confirmation Observation Physical examination Analytical procedures Reperformance
Confirmation about Inventory
Some Frauds in Inventory Over or under stating the value of Inventory Misclassifying Inventory Scrapping good inventory Stealing inventory
Examples of Audit Findings of Inventory Condition Criteria Causes Effects Recommendation