Understanding Auditing Inventory
Auditing Inventory is the process of cross-checking financial records with physical inventory and records.
Or,
An inventory audit is just taking a physical count of stock and inventory to verify a match to the accounting records.
Audit Evidence required -
1. To determine whether financial statements or records have been prepared in accordance with standards and free from material error.
2. To promote the accuracy, transparency, and independence of audit reports.
3. To verify the validity of financial records.
Inventory Audit Procedure
(a) ABC analysis
(b) Analytical Procedures
(c) Cut-Off Analysis
(d) Finished Goods Cost Analysis
(e) Freight Cost Analysis
(f) Matching
(g) Overhead Analysis
(h) Reconciliation
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