Inventory Audit – NBC Institute

AA – May 2019 – L2 – Q7 – Audit Evidence

Discussion on the importance of closing inventory to auditors, risks of misstatement, and constituents of inventory valuation.

Question

For many businesses (except service organizations), inventory is one of the areas that needs most attention from the auditor. Hence, audit work on inventory is often given to more experienced members of the audit team who will subject the work to a more rigorous review and quality control. In addition, IAS 2 requires that inventory should be valued at the lower of cost and net realizable value on an item-by-item basis.

You are required to:

a. Briefly explain SIX reasons why closing inventory is very important to the auditor. (6 Marks)

b. Explain FIVE principal risks of misstatement associated with closing inventory. (5 Marks)

c. Identify the constituents of cost and net realizable value in an inventory valuation exercise. (4 Marks)

Answer

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Tags: Cost and Net Realisable Value, IAS 2, Inventory Audit, Inventory Valuation, Misstatement Risks
Level: Level 2

Topic: Audit evidence
Series: MAY 2019

AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence

Explain audit procedures to obtain sufficient and appropriate audit evidence for Galito Ltd's inventories.

Question

Galito Ltd is a Ghanaian company that operates in multiple industries and has several subsidiaries. Due to the complexity of its operations, its inventories and properties are scattered across the country and used by any of its subsidiaries.

Required:
As the auditor of Galito Ltd, explain FIVE (5) audit procedures to help obtain sufficient and appropriate audit evidence for its inventories.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Procedures, Inventory Audit, Inventory Valuation
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAR 2024

AA – May 2019 – L2 – Q7 – Audit Evidence

Discussion on the importance of closing inventory to auditors, risks of misstatement, and constituents of inventory valuation.

Question

You are required to:

a. Briefly explain SIX reasons why closing inventory is very important to the auditor. (6 Marks)

b. Explain FIVE principal risks of misstatement associated with closing inventory. (5 Marks)

c. Identify the constituents of cost and net realizable value in an inventory valuation exercise. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost and Net Realisable Value, IAS 2, Inventory Audit, Inventory Valuation, Misstatement Risks
Level: Level 2

Topic: Audit evidence
Series: MAY 2019

AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence

Explain audit procedures to obtain sufficient and appropriate audit evidence for Galito Ltd's inventories.

Question

Required:
As the auditor of Galito Ltd, explain FIVE (5) audit procedures to help obtain sufficient and appropriate audit evidence for its inventories.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Procedures, Inventory Audit, Inventory Valuation
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAR 2024

Question Tag: Inventory Audit

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AA – May 2019 – L2 – Q7 – Audit Evidence

Discussion on the importance of closing inventory to auditors, risks of misstatement, and constituents of inventory valuation.

AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence

Explain audit procedures to obtain sufficient and appropriate audit evidence for Galito Ltd's inventories.

AA – May 2019 – L2 – Q7 – Audit Evidence

Discussion on the importance of closing inventory to auditors, risks of misstatement, and constituents of inventory valuation.

AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence

Explain audit procedures to obtain sufficient and appropriate audit evidence for Galito Ltd's inventories.

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Question Tag: Inventory Audit

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AA – May 2019 – L2 – Q7 – Audit Evidence

Discussion on the importance of closing inventory to auditors, risks of misstatement, and constituents of inventory valuation.

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AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence

Explain audit procedures to obtain sufficient and appropriate audit evidence for Galito Ltd's inventories.

You're reporting an error for "AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence"

AA – May 2019 – L2 – Q7 – Audit Evidence

Discussion on the importance of closing inventory to auditors, risks of misstatement, and constituents of inventory valuation.

You're reporting an error for "AA – May 2019 – L2 – Q7 – Audit Evidence"

AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence

Explain audit procedures to obtain sufficient and appropriate audit evidence for Galito Ltd's inventories.

You're reporting an error for "AA – Mar 2024 – L2 – Q3a – Audit and Assurance Evidence"

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