Inventory (INV) - Key Controls

Question 1

INV03.1

Answer 1

Review and approve inventory adjustments per Opco requirements

Question 2

INV03.2

Answer 2

Approve all sales orders prior to shipping

Question 3

INV03.3

Answer 3

Configure the system to automatically create shipping documents (i.e., packing lists) based on approved sales orders

Question 4

INV03.4

Answer 4

Compare and approve goods packed with shipping documents (e.g., packing list, bill of lading, etc.). Differences are investigated and resolved prior to shipment.

Question 5

INV03.5

Answer 5

Configure the system to automatically relieve inventory and transfer the cost of the product to COGS account upon a sales order being ship confirmed.

Question 6

INV03.6

Answer 6

Configure the system to automatically close sales orders when all goods are shipped and prevent additional shipments against the sales order.

Question 7

INV03.7

Answer 7

All inventory return requests must be approved by appropriate approver.

Question 8

INV03.8

Answer 8

Goods receipt from returns must be matched to an approved inventory return request.

Question 9

INV04.1

Answer 9

Review the reconciliation of the inventory account balances to the inventory sub ledger and the GL monthly. Any differences are investigated and resolved.

Question 10

INV05.1

Answer 10

Review the inventory aging

Question 11

INV05.2

Answer 11

Review the variance accounts (e.g., usage variance) for reasonableness.

Question 12

IV05.3

Answer 12

Review the inventory cost configuration.

Question 13

INV06.1

Answer 13

Count full physical inventory.

Question 14

INV09.1

Answer 14

Review an analysis of quarter end shipment to ensure proper cut off and that revenue and cost of sales recognition in the financial statements takes place when title transfers to the customer.