CPA Exam Simulation: Auditing Inventory: Internal Controls & Substantive Testing скачать в хорошем качестве

CPA Exam Simulation: Auditing Inventory: Internal Controls & Substantive Testing

Dive into the essentials of auditing inventory, focusing on internal controls and substantive testing. This video is ideal for accounting students, CPA candidates, and auditing professionals seeking to understand the procedures and importance of inventory audits. ✔️Check my website for additional resources: ✅https://farhatlectures.com/ 0:00 Introduction The Setup The video introduces a list of eight audit procedures. For each, you need to determine if it's a test of control or substantive test and state its purpose, focusing on which audit objective it addresses (0:17). Test 1: Reviewing client's written instructions for physical count (2:16). It's a test of control that addresses existence, completeness, accuracy, and classification. Test 2: Accounting for the numerical sequence of raw material requisition forms (3:45). This is a test of control to ensure raw materials are only issued with proper authorization, also dealing with the existence assertion. Test 3: Tracing the auditor's own test count to the final inventory compilation (4:47). This is a substantive test verifying the client's inventory compilation accuracy, completeness, and classification. Test 4: Accounting for the numerical sequence of inventory tags and tracing each tag to items on the warehouse floor (6:16). A substantive test to confirm the existence of inventory. Test 5: Comparing the quantity from the client's interim physical count with balances in the perpetual inventory master file (7:51). This is a substantive test for verifying the accuracy of the perpetual inventory record. Test 6: Tracing additions recorded in the finished goods perpetual inventory file to supporting production completion records (9:51). Can be both a test of control and a substantive test, verifying accuracy and proper classification. Test 7: Comparing unit cost on the inventory listing with prices on the supplier invoice (11:47). This is substantive testing to confirm the accuracy of inventory pricing. Test 8: Using computer-assisted techniques to calculate inventory turnover (12:55). This is substantive testing (an analytical procedure) to evaluate the overall reasonableness of inventory balances. What You'll Learn: Key internal controls in the inventory cycle Substantive testing methods for inventory Common risks and how to mitigate them Best practices for accurate inventory auditing #cpaexam #substantiveprocedures #auditing #auditprocedure