introduction to Auditing Inventory (Audit Approach)

Question 1

What must the audit approach consider for inventory?

Answer 1

Quantity
Valuation
Disclosure

Question 2

What does quantity consider?

Answer 2

Normally arrived at a year-end inventory count (unless solely a perpetual system)

Question 3

What does valuation consider?

Answer 3

Must apply IAS 2 Inventories

Question 4

What is a perpetual inventory system?

Answer 4

Where inventory is counted continuously throughout the year and a year-count is not undertaken

Question 5

When is a controls-based approach feasible?

Answer 5

As long as the controls over the system as appropriately designed

Question 6

When is a largely substantive approach is taken?

Answer 6

Where inventory quantities willbe determined by an inventory count at the year-end date