Management and Organizational Studies 3363A/B Chapter Notes - Chapter 17: General Ledger, Financial Statement, Audit Risk

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3363A/B
• Professor: Michelle Loveland

Document Summary

Inventory & distribution accounts: raw materials, work-in-process, finished goods, direct labour, manufacturing overhead, cost of goods sold. Internal storage, production and transfer: acquire raw materials, labour & overhead, ship goods and record revenue, physically observe inventory, price and compile inventory values. Methodology for designing tests of i&d cycles: set performance materiality; assess audit risk & inherent risk for inventory; preliminary analytical procedures, by assertion, assess control risk for inventory. Identify management assertions: design and preform tests of control, design and preform analytical procedures, design and preform tests of details. Audit test decisions: selection of audit procedures, timing, determining sample size, selection of items for testing. Conducting audit tests: cas 501 if inventory is material, the auditor must obtain sufficient evidence regarding the existence and condition of inventory by attending a physical inventory count. If attendance is impractical, the auditor must perform other procedures. If they cannot, they must modify their opinion in the auditors report.