審計(jì)學(xué)英文教學(xué)課件：Chapter 15 Inventory cycle

1、Chapter 15Audit of Inventory and Warehousing Cycle1Lecturer 陳丹Topic list Accounts in the inventory and warehousing cycleRelated documents and records in the inventory and warehousing cycleInternal control and tests of controls for inventory2Functions in the Inventory and Warehousing CycleProcesspurc

2、haseordersReceiverawmaterialsStorerawmaterialsProcessthegoodsStorefinishedgoodsShipfinishedgoodsReceiverawmaterialsPutmaterialsinstoragePutmaterialsinproductionPutcompletedgoods instorageShipfinishedgoodsFlowofinventoryPurchase requisitionPurchase orderReceiving reportVendors invoiceRaw materials pe

3、rpetual inventory master file Raw materials requisitionCost accounting recordsFinished goods perpetual inventory master fileCost accounting recordsShipping documentFinished goods perpetual inventory master fileCost accounting recordsRelated documentation3Flow of Inventory and Costs Raw Materials Beg

4、inninginventoryRawmaterialsusedPurchasesEndinginventoryDirect LaborActualActualAppliedAppliedManufacturing OverheadWork in ProcessBeginninginventoryEndinginventoryCost ofgoodsmanufacturedCost ofgoods soldFinished GoodsBeginninginventoryEndinginventoryCost ofgoods sold4Internal Controls1 Physical con

5、trols over raw materials, work-in-process, and finished goods inventory2 Adequate perpetual inventory master files3 Existence of adequate IC that integrate production and accounting records for the purpose of obtaining accurate costs for all products5Internal Controls1 Physical controls over invento

6、ries to prevent loss from misuse and theftLimited access to storage areasAssignment of custody of inventory to specific responsible individuals (responsible custodian)Approved pre-numbered documents for authorizing movement of inventoryeg, approved materials requisition for obtaining raw materials f

7、rom the storeroomapproved shipping document for transferring inventory from the storeroomCopies of these documents sent directly to accounting dept by the persons issuing them, bypassing people with custodial responsibilities 6Internal Controls2 Adequate perpetual inventory master files perpetual in

8、ventory master files maintained by persons who do not have custody of or access to inventory.kept Separately for raw materials and finished goods, normally not used for work-in-process.Information included about the units of inventory acquired, sold, and on hand. Or also Unit cost in well-designed c

9、omputerized system. 7Reasons for maintaining perpetual inventory master files:They provide a record of raw materials available for production and finished goods available for sale, which can be reviewed for obsolete or slow-moving items.They provide a record of items on hand, which is used to initia

10、te acquisition of additional materials.They provide a record that can be used to pinpoint responsibility for custody as part of the investigation of differences between physical counts and the amount shown on the records.8Internal Controls3 Existence of adequate IC that integrate production and acco

11、unting records for the purpose of obtaining accurate costs for all productsAn aid to mgt in controlling costs, costing and pricing inventoryCosting accounting records consist of master file, worksheets and reports* that accumulate material, labor, and overhead costs by job or process as the costs ar

12、e incurred* When jobs or products are completed, the related costs are transferred from work-in-process to finished goods on the basis of production department reports.9Control objectivesInternal ControlsRecording of inventoriesAll inventory movements are authorized and recordedInventory records onl

13、y include items that exist and belong to the entityCut-off procedures are properly applied to inventoriesgoods received is inspected for quantity and qualitySegregation of duties-custody and recording of inventoriesInventory records supported by appropriate documentationMaintenance of inventory reco

14、rds (units of inventory acquired, sold and on hand; unit costs in well-designed computerized system)Protection of inventoriesInventories are safeguarded against loss, pilferage or damagePrecautions against theft, misuse and deteriorationRestriction of access to storerooms (Authorization of goods out

15、wards and inwards)10Control objectivesInternal ControlsValuation of inventoriesThe costing system values inventories correctlyAllowance is made for slow-moving, obsolete or damaged inventoriesCheck condition of inventories purchased and value them at original cost Check condition of inventories at y

16、ear end and value them at lower of cost and realizable valueTreatment of slow-moving, damaged and obsolete inventoriesRegular inventory countsFair coverage so that all inventories that belong to the entity are counted at least once a yearCounts by persons independent of warehousingadjustmentsReconciliation of inventory count to book recordsSet re-order quantities and levelsInventory-holdingLevels of inventories held are reasonable11Tests of controls:.12SummaryIdentify the accounts and the classes of transactions in the inventory and warehousing cycl