Practical Internal Audit Questions on Inventories
The following Questions as follows:
Question 1
Describe briefly about the main objective of inventory count.
Question 2
What is completeness assertion for inventory?
Question 3
What is existence assertion for inventory?
Question 4
What are valuation and allocation assertion for inventory?
Question 5
Describe briefly the strong internal controls for inventory purchase processes.
Question 6
KPM Co faces problem of managing inventories, so recently inventories may lose.
Now management of company requests internal auditors and accountants corporate each other to make stock management procedure for KPM Company.
Required:
Make inventory or stock management procedure.
Question 7
TOP One Trading Company buys and sells three major products such as computers, LCDs and Printers.
Recently company noted that a few computers are not included in list of inventory record. Company suspects that other stocks may not include in list of inventory record.
Required:
You are required to make procedures for auditing inventory to make sure physical inventories are completeness with list of inventory records.
Question 8
FIRST TRADING Company is merchandising company locally.
The following extract of list of inventory record given to internal auditor for November 2016 as follows:
| Type of Inventories | Units |
| Phones | 800 |
| Computers | 70 |
| LCD | 30 |
| Air conditioners | 80 |
| Printers | 50 |
| Photocopiers | 30 |
| Scanners | 80 |
Required:
You are required to make procedures for auditing stocks to make sure physical stocks are existence.