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Audit Program Design Part III - Essay Example

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College
Author : tabitha09
Essay
Finance & Accounting
Pages 5 (1255 words)

Summary

Name: University: Abstract: Apollo Shoes, Inc is a planetary distributor specializing in superior athletic products. Some brands include Siren, Speakershoe and Spotlight. During the audit process, test of controls, substantive tests of transactions and analytical procedures must be designed…

Extract of sample
Audit Program Design Part III

Introduction The paper will focus on the inventory and warehousing cycle and cash cycle. Some of the types of transactions in the inventory and warehousing cycle include receiving raw materials, storage of raw materials, processing of the purchase orders, processing of the goods, storage of the completed goods and shipping them to customers (Luis, 2008). Cash is the most vulnerable to fraud and misappropriation by the staff. The analytical procedures for the warehousing and inventory cycle will compare the current gross margin in order to establish any understatement of the costs of goods sold and inventory (Gupta, 2005). The procedures will also look at the unit costs of inventory, the total inventory valuation, the manufacturing costs including the variable costs of each unit of inventory (Puttick, Esch & Kana, 2007). The substantive tests of transactions on inventory and warehousing cycle will ensure that inventory recorded on tags exists by randomly selecting tag numbers and physically identifying the existence of the inventory (Puttick, Esch & Kana, 2007). We will observe any possible movement of inventory during the count and ensure inventory is accurately recorded. Tests of controls are the internal control systems of the organization (Luis, 2008). ...
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