Assertion and Related Inventory Transactions Flashcards
Occurrence - Inventory transferred to inventory department using an approved, pre-numbered receiving report
Review and test procedures for the transfer of inventory
Occurrence - Inventory transferred to manufacturing using renumbered materials requisitions
Review and test procedures for issuing materials to manufacturing departments
Occurrence - accounting for numerical sequence of materials requisitions
Review and test client procedures for account for numerical sequence of materials requisitions
Occurrence - Physical safeguards over inventory
Observe the physical safeguards over inventory
Completeness - Accounting for numerical sequence of purchase orders, receiving reports, and vouchers
Review client’s procedures for accounting for numerical sequence of purchase orders, receiving reports, and vouchers
Completeness - Receiving reports matched to vendor invoice and entered in the purchases journal
Trace a sample of receiving reports to their respective vendor invoices and vouchers. Trace a sample of vouchers to the purchases journal.
Completeness - Procedures to include goods out on consignment and exclude goods held on consignment
Review and test client’s procedures for consignment goods
Authorization - Preparation and review of authorized purchase or production schedules
Review authorized production schedules
Authorization - Use of material requirements planning and/or just-in-time inventory systems. Review of inventory levels by design department.
Review and test procedures for developing inventory levels and procedures used to control them
Accuracy - Periodic or annual comparison of goods on hand with amounts shown in perpetual inventory records
Review and test procedures for taking physical inventory
Accuracy - Standard costs that are reviewed by management
Review and test procedures used to develop standard costs
Accuracy - Review of cost accumulation and variance reports
Review and test cost accumulation and variance reports
Accuracy - Inventory management personnel review inventory for obsolete, slow-moving, or excess quantities
Review and test procedures for identifying obsolete, slow-moving, or excess quantities
Accuracy - Perpetual inventory records reconciled to general ledger control account monthly
Review the reconciliation of perpetual inventory to general ledger control account.
Cutoff - All receiving reports processed daily by the IT department to record the receipt of inventory
Review and test procedures for processing inventory included on receiving reports into the perpetual records
Cutoff - All shipping documents processed daily to record the shipment of finished goods
Review and test procedures for removing inventory from perpetual records based on shipment of goods
Classification - Materials requisitions and production data forms used to process goods through manufacturing
Review the procedures and forms used to classify inventory
