Exam 11: Auditing Inventoriand PPE

In tracing opening inventory balancto working papers for the previous year, the auditor should make certain that any audit adjustments, agreed on in the previous year, were recorded.

An important procedure for the conduct of a physical inventory count is to maintain control over the count systems. Which of the following is not a common count system?

If the auditor was testing inventory pricing the audit objective being fulfilled would be:

All companiare required by Canadian Auditing Standards to maintain a perpetual inventory system.

The key issuin auditing property, plant, and equipment are ensuring that the property, plant, and equipment actually exist, are owned, and are properly valued with adequate provision for depreciation.

The application of analytical procedurto inventoriis not used very extensively since each company has its own inventory policiand procedurwhich make industry comparison somewhat useless.

Describe the audit process for inventory transactions, indicating the audit risks that need to addressed and the mitigating controls that can be implemented.

Which of these is not true regarding substantive procedurfor property, plant, and equipment in an initial audit:

Which of the following is not an income statement account related to property, plant, and equipment?

Specialized inventorimay require the assistance of experts in determining either the quantity (as in the case of aerial measurement of stockpiles) or value (as in the case of antiques).

ABC Ltd is a retailer who is planning to undertake a full inventory count at year-end. Control risk over inventory records for this entity is deemed to be:

Observation of inventory counts is a required audit procedure whenever:

When an asset is shown on the financial report other than at cost, which of the following is not required to be disclosed?

The auditor is concerned that the client has committed a number of errors in the capital/repair expenditurdistinction. In selecting items from the repairs expense account for investigation, the most appropriate audit procedure would involve:

As existence of property, plant, and equipment is the ket audit assertion, the auditor donot need to obtain evidence of sales, disposals, and trade-ins.

Generally, what is the assessment of control risk for transactions relating to property, plant, and equipment? Generally, what is the assessment of materiality in relation to property, plant, and equipment? Briefly discuss the assessment of inherent risk in relation to property, plant, and equipment.

For each of the following potential misstatements for inventories, identify a necessary control: Failure to record goods received Unreliable count procedurduring a physical inventory count Inappropriate basis for determining inventory costs Unauthorized removal of goods from inventory Insufficient extent of comparison between physical inventory count and inventory records Inadequate investigation and correction of differencbetween inventory count and inventory records

The auditor identifithe specific audit objective: "determine that property, plant and equipment (PPE) assets represent productive assets that are in use at balance date". This objective is derived from the:

List the four separate functions of maintaining inventory records. Identify the documentation used in each function to prevent inventory records from being manipulated.

Describe the audit process for property, plant, and equipment transactions, indicating the audit risks that need to addressed and the mitigating controls that can be implemented.