Auditing and Assurance Services 5th

Edition Louwers Solutions Manual

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Chapter 09 - Production Cycle

CHAPTER 09

Production Cycle

LEARNING OBJECTIVES

Review Exercises, Problems,

Multiple Choice
Checkpoints and Simulations

1. Describe the production cycle, including 1, 2, 3, 4, 5 20, 21, 22, 38 42

typical source documents and controls.

2. Give examples of tests of controls over 6, 7, 8, 9 23, 24, 26, 30, 37, 43, 44
conversion of materials and labor in a 39, 41
production process.

3. Identify and describe considerations 10, 11, 12, 13, 25, 27, 28, 29, 31, 45, 46, 47, 48, 49,
involved in the observation of physical 14, 15, 16, 17 32, 33, 34, 35, 36, 50, 51, 52, 53, 57,
inventory and tests of inventory pricing 40 58, 59
and compilation.

4. Describe some common errors and 18 ,19 53, , 55,56, 57

frauds in the accounting for production
costs, and related cost of goods sold and
design some audit and investigation
procedures for detecting these errors
and frauds.

SOLUTIONS FOR REVIEW CHECKPOINTS

9.1 Production planning
Production
Cost accounting

9.2 GAAP recognizes specific identification, weighted average, FIFO, and LIFO methods of accounting for
inventory.

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9.3 The auditor performs a walkthrough by talking to employees about their duties, observing performance, and
examining documents produced and agreeing them to related documents.

A walkthrough of a production transaction will collect the following documents:

• Production order.
• Bill of materials.
• Materials requisitions.
• Inventory record (raw materials issue).
• Journal entry (moving raw materials to work in process).
• Labor report (time records).
• Journal entry (charging labor to work in process).
• Production cost analysis.
• Inventory record (finished goods addition).
• Journal entry (moving work in process to inventory).

Documents should be agreed to production orders based on the bill of materials. The requisitions should
also agree to the inventory record, which is agreed to the journal entry.

The labor report would be agreed to time records and the journal entry. The journal entries would be
summarized and agreed to the production cost.

The finished goods addition would be agreed to the production cost and the journal entry.

Controls: The auditor would look for the following:

• Approval signatures on requisitions, and time records.

• Approvals of journal entries.
• Tests of accuracy of calculations.
• Separation of
a. Custody of the inventory.
b. Record keeping.
c. Authorization of use of materials and incurring time.
d. Reconciliation of inventory records to physical counts.

9.4 Some work to obtain assurance about the reasonableness of the client’s sales forecast needs to be
performed. All the auditors need to accomplish is to learn about the assumptions built into the forecast for
the purpose of ascertaining their reasonableness. In addition, some work on the mechanical accuracy of the
forecast should be performed to avoid embarrassing reliance on faulty calculations.

9.5 If high levels of production were planned and carried out in anticipation of high sales that did not occur, the
inventory should show an increase. The potential problem is overvaluation (overstatement) of slow-moving
or obsolete inventory and understatement of cost of goods sold. Another potential problem is that overhead
would be allocated on inaccurate volume expectations.

9.6 Failure to record materials used should be prevented by matching documents. For example, dated raw
materials inventory issues not matched to materials in the production cost analysis indicate a possible
omission of material used in production. Use of prenumbered documents and reports to account for a
numerical sequence is also a primary means of preventing omission of transactions.

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9.7 Auditors are looking for the separation of duties in authorization of transactions, custody of assets,
recording of transactions, and periodic reconciliation. In the production cycle, these duties are separated as
follows:

a) Initial authorization is a production order prepared in production planning and control; authorizations
of labor hours and material to be used are given by the supervisor when job time tickets are given to
employees and material requisitions are sent to raw materials stores.

b) Cost accounting clerks analyze independent recording of labor and materials in production cost from
records after comparing two sources.

c) Raw materials stores maintain physical custody of raw materials, none of which are released without
authorization (requisition) and record of withdrawal. The supervisor maintains custody of
work-in-process inventory.

9.8 The production order record provides a control over the quantity of product manufactured by the
production department. Used in combination with the bill of materials, this record provides an approved
list of materials that should be used. This list can be compared to the actual materials used as recorded by
the cost accounting department.

9.9 This is a question about the direction of tests of controls.

a. To determine whether all authorized production was completed and placed in inventory or written off
as scrap, the auditors should select a sample of approved production orders from the production
planning department files and then trace them forward through cost accounting to inventory or
write-offs.

b. To determine whether finished goods inventory was actually produced and costs were properly
accumulated, the auditors should select a sample of production put in the Inventory account and then
vouch these production reports to approved production orders and cost calculations of material, labor,
and overhead.

9.10 The auditor considers these characteristics in a review of the client’s inventory-taking instructions:

a. Names of client personnel responsible for the count.

b. Dates and times of inventory taking.

c. Names of client personnel who will participate in the inventory taking.

d. Instructions for recording accurate descriptions of inventory items, for count and double-count,
and for measuring or translating physical quantities (such as counting by measures of gallons,
barrels, feet, dozens).

e. Instructions for making notes of obsolete or worn items.

f. Instructions for the use of tags, punched cards, count sheets, computers, or other media devices
and for their collection and control (a typical inventory count sheet is illustrated at Exhibit 9.7).

g. Plans for shutting down plant operations or for taking inventory after store closing hours and plans
for having goods in proper places (such as on store shelves instead of on the floor or of raw
materials in a warehouse rather than in transit to a job).

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h. Plans for counting or controlling movement of goods in receiving and shipping areas if those
operations are not shut down during the count.

i. Instructions for computer compilation of the count media (such as tags, count sheets) into final
inventory listings or summaries.

j. Instructions for review and approval of the inventory count; notations of obsolescence or other
matters by supervisory personnel.

k. Instructions for making changes and corrections to count tickets.

9.11 Dual-direction sampling in the context of inventory test counts proceeds as follows:

a. In one direction, a sample of inventory items can be chosen from the perpetual records or
inventory count tags for test count to ascertain that recorded inventory was counted (existence).

b. In the other direction, the auditor can count a sample of items in their locations, record them, and
later trace them to the perpetual records and inventory summary count sheets to ascertain whether
all inventory in place was recorded and counted (completeness).

9.12 Amounts on inventory count sheets and tickets become the amounts in the inventory, so a fictitious item on
the count sheet or ticket becomes a fictitious item in inventory. If the auditors do not obtain control
information, the client can easily add amounts to the inventory count without the auditors’ knowledge.

9.13 The auditor should document:

• Whether the client’s personnel were following the inventory instructions.
• Test counts taken, including description, and quantity.
• The ticket or count sheet numbers that were used as well as the numbers of voided and unused
tickets.
• The last receiving reports and shipping documents used and the number of the next unused item.
• The condition of the inventory.
• Any inventory on hand that is not owned by the client.
• Any unusual items noticed during the count.

9.14 The auditor must obtain shipping and receiving cutoff information during the physical inventory
observation to ensure that items recorded as receipts or shipments in the accounting records match
purchases included and sales excluded from inventory in the perpetual records. The perpetual records are
compared to the count to determine the book to physical inventory adjustment.

9.15 In this type of situation, the auditor will arrange to be present during one more of the test counts, and
importantly, he or she will evaluate the cycle or statistical plan for validity. During his or her observation of
the inventory taking, the auditor will employ the usual inventory audit procedures, perform test counts and
be responsible for a conclusion concerning the reasonable accuracy of perpetual quantity records.

9.16 The client’s managers may be making record of the auditors’ test counts so they can fraudulently change
the counts on items the auditors did not count.

9.17 Obsolete or slow-moving inventory is often indicated by:

• Inventory turnover ratios.
• Trend analysis of inventory levels.
• Days sales in inventory ratio.
• Sales trend analysis.

Note: All of these procedures are more powerful as you disaggregate the data.

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9.18 If a client is counting inventory at multiple locations, the auditor must visit a sample of the locations on a
surprise basis to observe the counts. The number of locations depends on the materiality of the inventory
and the quality of the client’s controls. The auditor should notify the client that she or he will be visiting
some locations so personnel will know to be cooperative but should not tell the client which locations will
be visited.

9.19 An inventory roll-forward is the client’s process for updating the inventory balance for shipments and
receipts from the time of the physical count to the end of the fiscal year. Auditors will normally be
concerned with reviewing the controls over the roll-forward and testing the entries to supporting
documents. The auditor can also use analytical procedures to determine the reasonableness of the ending
inventory.

SOLUTIONS FOR MULTIPLE-CHOICE QUESTIONS

9.20 a. Incorrect This is allowed by GAAP.
b. Incorrect This is allowed by GAAP.
c. Incorrect This is allowed by GAAP.
d. Correct Although standard costs are commonly used, they must not be materially
different than one of the allowed methods.

9.21 a. Incorrect Raw materials and supplies purchased are linked through the acquisition and
expenditure cycle.
b. Incorrect Labor and costs are linked through the payroll cycle.

c. Incorrect Cost of goods sold and reduction to finished goods inventory is linked through
the revenue and collection cycle.
d. Correct The finance and investment cycle is not directly linked to the production cycle,
although it is indirectly linked through investments in property, plant, and
equipment.

9.22 a. Incorrect This is what the company plans to sell, not produce. Some of the planned sales
may come from existing inventory, and some of the production may be sold in
future periods.
b. Incorrect These reports indicate what was actually produced.
c. Correct The production plan shows what is planned to be actually produced.
d. Incorrect The purchases journal shows what was actually purchased during the period.

9.23 c. Correct The job cost sheets indicate the cost used in determining the accuracy of
inventory produced.

9.24 a. Incorrect This is a common practice that enhances efficiency.

b. Incorrect See answer (a).
c. Correct This weakness is an improper combination of inventory custody and record-
keeping responsibilities.
d. Incorrect See answer (a).

9.25 a. Incorrect The most meaningful analytical procedures are performed at the most
disaggregated level, in this case, the product level.
b. Incorrect The most meaningful analytical procedures are performed at the most
disaggregated level, in this case, the product level.

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c. Correct This is the most disaggregated level of the choices given.

d. Incorrect The most meaningful analytical procedures are performed at the most
disaggregated level, in this case, the product level.

9.26 a. Incorrect This might detect the theft but wouldn’t prevent it.
b. Incorrect This wouldn’t necessarily detect the theft.
c. Correct The separate space facilitates security, and the frequent counts enable company
personnel to detect shortages in a timely manner.
d. Incorrect This would account for legitimately moved inventory, but those people stealing
inventory would not file proper forms.

9.27 a. Incorrect This step would not provide evidence of whether the items are owned.
b. Incorrect This step would not detect obsolescence.
c. Incorrect Ensuring physical presence would require tracing from the listing to inventory
tickets.
d. Correct If the sample is from the inventory in the physical location, the tracing has the
objective of auditing the completeness of the final inventory schedule.

9.28 a. Incorrect This would make the count lower than the perpetual records.
b. Correct Unrecorded credit memos means that the returned inventory is not in the
perpetual records; thus, the recorded amount will be smaller than the amount on
hand.
c. Incorrect This would make the perpetual records higher than the physical count
d. Incorrect This would make both the physical count and perpetual records too low.

9.29 a. Incorrect Controls must be strong for the roll-forward to be reliable.

b. Correct Auditors rely on accurate perpetual records to maintain an accurate inventory
balance during the intervening period between the physical count and the
balance sheet date.
c. Incorrect Slow-moving inventory is easier to roll-forward.
d. Incorrect This has nothing to do with when the count should be taken.

9.30 a. Incorrect This step helps ensure existence as well as completeness; however answer (c) is
better.
b. Incorrect This ensures that goods will not be stolen (existence assertion).
c. Correct Checking the numbering sequence on prenumbered receiving reports is a way to
detect omission of the recording of inventory received.
d. Incorrect These are not incompatible duties that must be separated.

9.31 a. Correct An auditor does not expect all inventories to which the auditee has title to be on
hand at the date of the count. Some purchased goods may still be in transit at
that time. Also, some inventory may be on consignment or in public warehouses
although properly included in the count.

9.32 a. Incorrect This may be done, but the persuasiveness is low because of the weak controls.
b. Incorrect No! Controls are tested when they are strong and can be relied on.
c. Correct If control risk is high, a timelier audit procedure may be necessary, and
extending the results of work done on an interim basis to year-end might be
inappropriate. Thus, observation of inventory at year-end would provide the best
evidence as to existence.
d. Incorrect This can be done only if controls can be relied on.

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9.33 a. Incorrect This procedure does not provide evidence about rights and obligations.
b. Correct Tracing the details of test counts to the final inventory schedule assures the
auditor that items in the observed physical inventory are included in the
inventory records. The auditor should compare the inventory tag sequence
numbers in the final inventory schedule to those in the records of his or her test
counts made during the client’s physical inventory.
c. Incorrect The auditor would go in the opposite direction to test existence and occurrence.
d. Incorrect This pertains to the presentation and disclosure assertion.

9.34 a. Incorrect Physical presence does not necessarily imply ownership. The goods may be
pledged or on consignment.
b. Correct The major audit objective of testing the assertion of rights and obligations for
inventories is to determine that the entity has legal title or similar rights of
ownership to the inventories. Typically, the auditor will examine paid vendors’
invoices, consignment agreements, and contracts.
c. Incorrect This is a test for cutoff.
d. Incorrect The wording of the question implies that this is a test for presentation and
disclosure. The procedure does, however, reveal obligations for purchase
commitments. Answer (b) is better because of the way the question is worded.

9.35 a. Incorrect Turnover has little to do with the existence assertion.

b. Incorrect Turnover has nothing to do with rights and obligations.
c. Incorrect See answer (b).
d. Correct Assertions about valuation or allocation concern whether asset, liability,
revenue, and expense components have been included in the financial statements
at appropriate amounts. An examination of inventory turnover pertains to the
audit objective of identifying slow-moving, excess, defective, and obsolete items
included in inventories. This audit objective relates to the valuation or allocation
assertion.

9.36 a. Incorrect See answer (d).

b. Incorrect See answer (d).
c. Incorrect See answer (d).
d. Correct The first inclination is to choose answer (a) because the auditor is vouching, and
vouching usually implies a test for existence. However, in this case, a vendor
invoice would provide evidence about only the amount that is being billed
(valuation) but would not provide information regarding the fact that the goods
were received and appropriately included in the inventory status report.
Vouching for existence and tracing for completeness are good guidelines, but
should not replace the students thought process on what evidence is being
gathered

9.37 a. Incorrect Inspecting documents for approvals is a typical test of controls.

b. Incorrect See answer (d).
c. Incorrect See answer (d).
d. Correct Policy and procedure manuals are least important because the most important
features are the actual workings of the controls as indicated by the other three
choices.

9.38 a. Incorrect This is the focus of substantive tests.

b. Incorrect See answer (a).
c. Incorrect Financial statements but not accounting systems per se should be produced in
accordance with GAAP.
d. Correct Auditors need to determine whether the cost accounting system assigns costs
properly to the inventories.

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9.39 a. Incorrect Cost ledgers are focused more on cost than on quantities.
b. Incorrect The perpetual inventory records are not original documents.
c. Incorrect Receiving reports usually reflect materials going into raw materials, not work-in
-process.
d. Correct Material requisitions are the authorization for the inventory custodian to release
raw materials and supplies to production personnel.

9.40 a. Incorrect This tests whether the reductions in inventory for shipments were accurate.
b. Incorrect This tests whether the additions to raw materials inventory for purchases were
accurate.
c. Incorrect This provides an overall test of the accuracy of the perpetual records.
d. Correct If the controls are excellent and the roll-forward is tested, a recount is not
necessary.

9.41 a. Incorrect If controls are weak and control risk is high, the auditor of a nonpublic company
would not test the controls.
b. Incorrect Tests of controls do not test inherent risk.
c. Correct The auditor tests the controls to reduce substantive tests.
d. Incorrect This is not a requirement of GAAS for nonpublic companies.

SOLUTIONS FOR EXERCISES, PROBLEMS, AND SIMULATIONS

9.42 Internal Control Questionnaire Items: Possible Error or Fraud Due to Weakness

Question Possible Error or Irregularity

1 Fraud or error in production, payroll, or reporting concealed in cost records.
2 Unauthorized production for personal products.
3 Materials withdrawn from inventory or hours worked for unauthorized projects.
4 Materials withdrawn for personal use.
5 Production may be started for uneconomic jobs or personal projects.
6 Materials and labor may be used for uneconomic jobs or personal projects.
7 Errors in material usage or theft by storeroom employees.
8 Errors in labor costs.
9 Foreperson incorrectly requests material or assigns job skills.
10 Not all material or labor accounted for correctly. The foreperson could also conceal
unauthorized material or labor in an authorized job.
11 Production orders lost and accounting incomplete.
12 Lost forms resulting in labor or material used but not recorded.
13 Labor or material used but not recorded.
14 Issue slips not compared to material used reports. Material withdrawn from inventory
not accounted for. Lost forms resulting in inventory not charged to Cost of Goods
Sold.

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15 Failure to disclose agreements in footnotes.

16 Inclusion of goods on consignment in inventory accounts.
17 Scrap reporting incorrect. Incorrect perpetual inventories.
18 Differences not investigated. Labor used not accounted for by assigning to a job.
19 Incorrect costs used; inventory improperly valued.
20 Comparison not made or difference not investigated. Production completed not put into
inventory.
21 Inventory transactions posted in wrong period. Cutoff errors.
22 Errors in summary entries not detected and corrected.
23 Accounting entries may get put in the wrong account.

9.43 Tests of Controls Related to Controls and Assertions

Procedure (a) Strength (b) Assertion

(1) Preparation of summary material and Valid work-in-process inventory transactions are
labor entries. recorded and none omitted (completeness).
(2) Production cost sheets prenumbered and Valid finished goods inventory transactions are
accounted for. recorded and none omitted (completeness).
(3) Independent check on materials and labor Recorded labor and material transactions are
used. valid (occurrence).
(4) Issue forms secure and used by authorized All material issues are authorized (occurrence).
personnel. Prenumbered and accounted All issue forms are recorded (completeness).
for.
(5) Use of control account. Production transactions are recorded properly
(classification).
(6a) Recording of materials used. Material used is recorded in proper period
(accuracy).
(6b) Standard control number. Job accounting is complete (completeness).
(6c) Material received custody. Material used is authorized (occurrence).
(6d) Proper material received. Job cost accounting accurate (accuracy).
(6e) Proper release of correct materials. Material release recorded accurately (accuracy).
(6f) Material release authorized and timely. Authorized issue of material and in proper period
(occurrence, accuracy).
(7) Timely recording. Inventory recorded in proper period
(completeness, cutoff).

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9.44 Cost Accounting Test of Controls

Procedure Evidence

Sample of Cost Accounting Payroll Analyses

Reconcile periodic totals with payroll register record of Incomplete costing deviation.
payments.

Vouch costs to time records. Invalid time analyzed deviation.

Trace cost accounting labor distributions to management Inaccurate reporting deviation.

reports and postings in general ledger and subsidiary Incomplete accounting deviation.
account(s). Wrong classification deviation.

Sample of Recorded Labor Cost Items

Vouch labor cost entries and management reports to Invalid entries deviation.
supporting labor cost analyses.

9.45 Inventory Count Observation: Planning and Substantive Procedures

a. Sammy should find in the audit working papers a planning memo describing the client’s
inventory-taking plan and notes about the auditors’ firsthand observation of the instructions being
given to counters, along with a memo about the auditors’ observation of the counting. This memo
should tell about supervision of the audit staff, and the working papers (test counts) should show
the review signatures of the supervising auditors.

b. Working papers should document performance of these substantive procedures for the existence
and completeness assertions:

(1) Conduct an observation of the company’s physical inventory count.

(2) Scan the inventory compilation for items added from sources other than the physical
inventory count.

(3) At year-end, obtain the number of the last shipping and receiving documents. Use these
to scan the sales, inventory/cost of sales, and accounts payable entries for proper cutoff.

(4) Confirm or inspect inventories held in public warehouses.

(5) Select sample of used tags and trace them to the items on the floor.

9.46 Sales/Inventory Cutoff

In view of the information given, the following adjusting entries would be necessary:

For the first item:

Inventory Control 28,400

Inventory Variation (CGS) 28,400

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For the third item:

Sales 21,300
Accounts Receivable 21,300

Inventory Control 18,900

Cost of Sales 18,900

Because the goods in the first item were shipped prior to the taking of the physical inventory, the Inventory
Control account was reduced by the cost of these goods in the adjustment that arose from the physical
inventory. Because the client credited Inventory Control for the cost of these goods on December 16, one of
these two credits must be removed. The above entry reverses the one made on December 15 with respect to
these goods and leaves Cost of Sales properly charged with the $28,400 as a result of the December 16
entry. The sales entry was made properly and requires no adjustment.

In the second item, the client has reduced the control account at the shipment date prior to taking the
physical inventory. The control was in agreement with the physical count on December 15 so far as these
goods were concerned, and the December 15 adjustment did not relate to these goods. Because the accounts
involved are in agreement with the facts at both December 15 and December 31, no adjustment is
necessary.

The third item is a sale recorded too early, and both the revenue and cost recognition need to be revised.

9.47 Purchasing Cutoff

a. Correcting entry under periodic system

Inventory (RR#1183, 1184) 29,335.13

Accounts Payable (RR# 1183) 11,482.57
Purchases 17,852.56

b. Correcting entry under perpetual system

Inventory (RR#1183, 1184) 29,335.13

Accounts Payable (RR# 1183) 11,482.57
Cost of Goods Sold 17,852.56

9.48 Statistical Sampling Used to Estimate Inventory

a. The following procedures are based upon, but not copied from, Appendix 9B:

(1) Review and be satisfied with the client’s physical inventory-taking procedures.
(2) Observe the physical count.
(3) Make test counts where appropriate.
(4) Trace selected count data to the inventory compilation.
(5) Select items from the compilation and vouch them to original count data.
(6) Select items from the warehouse at random and trace these items to the perpetual
inventory record.
(7) Verify footings.
(8) Compare inventory compilation amounts to the subsidiary ledger control accounts and
investigate significant differences.
(9) Ascertain that there was a proper purchases and sales cutoff.
(10) Review the treatment of merchandise in transit and consigned merchandise.

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(11) Confirm merchandise in public warehouses.

(12) Perform an overall analytical review of inventories.
(13) Account for all client inventory count sheets.
(14) Be sure that inventory items are properly classified, in good condition, and of proper
quality.

b. When a client uses statistical sampling to estimate inventories, the auditor should perform
procedures similar to the following:

(1) Review the client’s procedures and methods for determining inventories to ascertain that
they are sufficiently reliable to produce results substantially the same as those that would
be obtained by a 100 percent inventory count.
(2) Be satisfied that the statistical sampling plan to be used by the client has statistical
validity and will be properly applied and that planned tolerable misstatement and
sampling risk as defined statistically will be reasonable.

(3) Ascertain that proper steps have been taken to ensure that all parts and supplies in the
warehouse are included in the perpetual inventory record. This would normally be
checked before the physical count.

(4) Be present when the sample is drawn to make sure that the requirements for random
selection are properly observed and that all items in the inventory have an equal or
determinable probability of selection.

(5) Be present to observe counts and be satisfied with the client’s counting procedures. The
inventory observation can be made either during or after the year-end of the period under
audit if well-kept perpetual records are maintained and the client makes periodic
comparisons of physical counts with such records.

(6) Review the statistical evaluation and be satisfied that the estimated value of the tolerable
misstatement at a given level of sampling risk meets the materiality requirements set for
the audit.

9.49 Inventory Procedures Using Computer-Assisted Audit Techniques (CAATs)

Basic Inventory Audit Procedures How Audit Software and Inventory Data Files Can
Help

a. Observe the physical count, making Determine which items are to be test counted by making
and recording test counts where a random sample of items from the inventory file as of
applicable. the date of the physical count.

b. Test the mathematical accuracy of the Mathematically compute the dollar value of each
inventory compilation (summary). inventory item counted by multiplying the quantity on
hand by the cost per unit and verify the addition of the
extended dollar values.

c. Compare the auditors’ test counts to Arrange test counts in a format identical to the inventory
the inventory records. file and matching the files.

d. Compare physical count data to Compare the total extended values of all inventory items
inventory records. counted and the extended values of each inventory item
counted to the inventory records.

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e. Test the pricing of the inventory by Prepare a file of costs and match to the inventory file.
obtaining a list of costs per item from
buyers, vendors, or other sources.

f. Examine purchase and sale cutoff. List a sample of items on the inventory file for which the
date of last purchase and date of the last sale are on or
immediately prior to the date of the physical count.

g. Ascertain the propriety of items of List items located in public warehouses.

inventory located in public
warehouses.

h. Analyze inventory for evidence of List items on the inventory file for which the date of the
possible obsolescence. last sale indicted a lack of recent transactions.

i. Analyze inventory for evidence of List items for which the quantity on hand is excessive in
overstocking or slow-moving items. relation to the quantity sold during the year.

j.. Perform overall test for accuracy of List items, if any, with negative quantities or costs.
inventory master file.

9.50 CAATs Application: Inventory

a. The purpose of a computer audit software package is to provide computer programs that can
process a variety of file media and record formats to perform a number of functions. A package
can be used to perform or verify mathematical calculations; to include, exclude, or summarize
items having specified characteristics to provide subtotals and final totals; to compute, select, and
evaluate statistical samples for audit tests; to print results in a form specified by the auditor; to
arrange detailed items in a format or sequence that will facilitate an audit step; to compare, merge,
or match the contents of two or more files; and to produce machine-readable files in a format
specified by the auditor.

b. Ways in which a general-purpose computer audit software package can be used to assist in the
audit of inventory of Boos & Becker, Inc., include the following:

(1) Compare data on the inventory count sheets to data on the computer inventory master file
and list all differences. This will ensure that the set of count cards furnished to the CPA is
complete.

(2) Determine which items and parts are to be test counted by making a random selection of
a sample from the audit deck of count cards or the disk inventory master file. Exclude
from the population items with a high unit cost or total value that have already been
selected for test counting.

(3) Read the client’s disk inventory master file and list all items or parts for which the date of
last sale or usage indicates a lack of recent transactions. This list provides basic data for
determining possible obsolescence.

(4) Read the client’s disk inventory master file and list all items or parts of which the
quantity on hand seems excessive in relation to quantity used or sold during the year.
This list provides basic data for determining overstocked or slow-moving items or parts.

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(5) Read the client’s disk inventory master file and list all items or parts of which the
quantity on hand seems excessive in relation to economic order quantity. This list should
be reviewed for possible slow-moving or obsolete items.

(6) Enter the audit test count quantities into the computer. Match these counts against the
client’s adjusted disk inventory file comparing the quantities on the cards to the quantities
on the disk file and list any differences. This will indicate whether the client’s year-end
inventory counts and the master file are substantially in agreement.

(7) Use the adjusted disk inventory master file and independently extend and total the
year-end inventory and print the grand total on an output report. When compared to the
balance determined by the client, this will verify the calculations performed by the client.

(8) Use the client’s disk inventory master file and list all items with a significant cost per
unit. The list should show cost per unit and both major and secondary vendor codes. This
list can be used to verify the cost per unit.

(9) Use the costs per unit on the client’s disk inventory master file and extend and total the
dollar value of the counts on the audit test count cards. When compared to the total dollar
value of the inventory, this will permit evaluation of audit coverage.

9.51 Inventory Evidence and Long-Term Purchase Contracts

a. Gathering evidence about the contract would involve reading it, discussing the terms with
management, asking if any attempt would be made to renegotiate the price, and confirming the
terms of the contract with All Purpose’s.

b. Facts cited that the auditor would have to discover consist of the current market price information
and the informed expectations about the duration of the price level. A general awareness of
economic conditions, newspaper reports, aluminum industry trade sources, and consultation with
metals commodity experts are sources and means of confirming these “facts.”

c. By all indications, there should be a write-down of inventory to market and a current recognition
of loss on the firm purchase commitment.

Current inventory write-down:

Inventory per books $ 240,000
Inventory at market 400 tons@
$.20/lb 160,000
Write-down to market $ 80,000

Loss on purchase contracts:

Contract purchases
500 tons $300,000
700 tons 420,000
1,000 tons 500,000 $1,220,000
2,200 tons @ $400/ton market 880,000
Loss on purchase contract $ 340,000

9-14
Chapter 09 - Production Cycle

9.52 Tracing the Inventory Count

a. Inventory plan steps for tracing inventory count information.

(1) Obtain client’s listing of final inventory count.

(a) Use CAATs to foot listing and check for numeric sequence of inventory tags.
(b) Agree total to final inventory in general ledger.
(c) Agree test counts obtained during the count to the listing for quantity and
description.

(2) Follow up on any unusual items noted during the count.

b. Possible causes of items noted.

(1) It may be that the client did discover additional items. However, the client may be
attempting to fraudulently inflate inventory.

(2) These may be honest errors, or, again, this may indicate possible fraud.

(3) These items are clearly obsolete. Even if the goods aren’t broken, they aren’t being sold.

c. Follow-up procedures

1. Request to see the items and the documentation of when they were received. Inquire of
count personnel about why they were missed and how they were found.

2. Select a large sample of additional tickets and agree them to the listing. Consider having
client re-input all the tickets. Determine whether there is a pattern to the errors (all
inventory increasing, all in one area, all by one employee).

3. Determine client’s plans for selling. Include these items in the lower of cost or market
testing, incorporating any planned discounts or other costs of disposing. Ask about any
other slow-moving items.

9.53 FIFO Inventory Pricing

a. The cost of the jump suits should be:

600 @ $782= $469,200

663 @ $777= $515,151
$984,351

The adjusting entry should be:

Cost of Goods Sold 3,315

Inventory 3,315

b. Yes, market value is replacement cost. Thus, the replacement cost is $750. Assuming this is
between the net realizable value (ceiling) and the net realizable value less a normal margin (floor),
the jumpsuits should be valued at (1263 @ $750) $947,250. The adjusting entry should be:

9-15
Chapter 09 - Production Cycle

Cost of Goods Sold 40,416

Inventory 40,416.

9.54 Toying around with the Numbers

Audit Approach

Objective: 1) Obtain evidence relevant to the accuracy of the inventory including inventory obsolescence.
2) Obtain evidence of proper classification of tooling costs and the amortization of such costs.

Control: The sales forecast should be based on realistic assumptions and expectations. The company should
have documentation or plausible explanations for the assumptions underlying the forecast. Detail records of
tooling cost balances by toy line should carry forward from the end of the prior year to the beginning of the
current year in the same amount and for the same toy lines just like the cost of fixed assets.

Tests of controls: Nothing about reviewing a sales forecast for reasonableness is routine. The company’s
documentation, if any, should be studied. Persons responsible for its preparation should be interviewed.
One typical procedure is to track the record of management’s past sales forecasts with subsequent actual
sales experience. Responses to inquiries should be analyzed for reasonableness on whatever bases are
available (excluding wild optimism).

Audit of balances: Much of the balance-audit work on inventory obsolescence flows directly from the
control testing. In this case, the reliability of the forecast was the crucial step because inventory was not
even flagged for the LCM calculation unless it exceeded the forecast. (Not much could be determined from
the physical observation because toys don’t show signs of mold or rust. When oversupplied, they are sold at
close-out prices. However, a few parts and raw materials might be “observed” as questionably obsolete.)

Review the forecast for curious discrepancies. In this case, zero differences between inventory quantity on
hand and forecast sales of toys and usage of parts should bring suspicion that the forecast was “plugged.”
Further inquiry into the forecast process is warranted.

Beginning balances of unamortized tooling costs should be traced to prior-year working papers or the
client’s prior-year records. This should have showed the movement of prior-year amounts to different toy
lines. Amortization rates should be tested against the forecasts, and the forecast experience should be
reviewed.

Discovery Summary (Adapted; ASR 292)

Find obsolete or unsalable inventory, determine inventory valuation, and identify appropriate classification
of costs.

Inventory and deferred cost overstatement: The auditors did not notice anything curious about inventory
quantities and forecast quantities being equal in 19 of 128 lines sampled for detailed audit. They did not
notice the interchangeable part numbers’ reference to the part itself instead of to a new toy. In one of the
years, they did not compare prior forecast to subsequent actual sales experience; in the other year, the
auditors made the comparison but accepted management’s explanation of how sales would increase.

9-16
Chapter 09 - Production Cycle

The auditors apparently did not trace the beginning tooling balances to prior year-end balances and failed to
notice the movement of the amounts to other toy lines. However, they did notice the poor forecast
experience for tooling amortization and recommended an additional $2 million amortization of the prepaid
expense. After discussion with management, an adjustment to amortize another $1.4 million tooling cost
was recorded. That still left the balance overstated because the auditors recommended an adjustment only
for the sample of items they tested but did not project the misstatement to the entire deferred cost
population.

9.55 No Defense for These Charges

Audit Approach

Objective: Obtain evidence of the reliability of labor costs deferred as tooling and the amount claimed as
cost overrun reimbursement on defense contracts. Obtain evidence of the “existence” of the labor cost
reimbursement claim in terms of its being supported by sufficient documentation to justify carrying as an
asset.

Control: The major control lies in the procedures for documenting the reliability of labor cost assignments
identifying the time and cost specifically to the categories claimed. For the reimbursement claim, the
circumstances also need to meet the terms of the contract respecting cost overrun reimbursement.

Tests of controls: The test of control activity is to select a sample of journal entries that created the assets
deferred tooling cost and cost reimbursement claim. Vouch them to supporting documentation. The
transactions can be audited for control over occurrence and accuracy. However, these procedures will also
satisfy the dual purpose of auditing the asset balances that arise directly from the transactions.

Audit of balances: The account balances created by the deferral journal entries are audited (“dual-purpose
procedure”) by auditing the supporting documentation. These balances were created entirely by the journal
entries and their “existence” as legitimate assets (cost deferral and reimbursement claim) depends on the
believability of the supporting explanations. In connection with the defense contract claim, auditors can
review it with knowledge of the contract and the extent of documentation required by government contract
auditors.

Discovery Summary

By performing the procedures outlined in the Audit Approach section, the manager, audit senior, and staff
accountants on the engagement discovered all the questionable and improper accounting.

Inventory and deferred cost overstatement: They noticed that the tooling cost deferral labor cost was
“supported” by work orders of recent date and numerical sequence, but the labor charge tickets were
created several months before. This finding tipped them off that the later journal entry establishing the
deferred charge was invented for income manipulation purposes later in the fiscal year.
The government contract cost overrun claim had similar deficient documentation. The labor cost had
no associated work orders connected with the government contracts in progress. Collectability was very
doubtful. The account was adjusted to “write off” the claim.

9-17
Chapter 09 - Production Cycle

9.56 Chips Ahoy

Audit Approach

Objective: Obtain evidence of the reliability about the value of inventory and the movement of inventory
shipments. Obtain evidence concerning the value of specific computer chips in the marketplace to
determine the lower of cost or market in inventory valuation.

Control: The major control lies in the procedures for documenting the value of inventory including the
ability to sell inventory and the determination of the market value of computer chips manufactured by ECI.
What are the inventory value principles in use (e.g., LIFO) and what are the controls over the inventory
calculation (e.g., competence of personnel, review of calculations). Review proper documentation for
receiving and removing inventory.

Tests of controls: Review documentation for receiving inventory and review controls over inventory from
receiving to receipt in inventory, Review documentation for the sale of inventory and review controls over
inventory from removal from inventory to shipping, Review all inventory documents for proper approval.
Review duties of inventory personnel and ensure adequate separation of duties.

Audit of balances: Perform analytical procedures on inventory including inventory turnover and days sales
in inventory. Review sales reports for slow-moving items or unusual sales patterns such as few but very
large sales. The test of control activity is to select a sample inventory items and vouch to vendor invoices
for pricing.

Vouch inventory to vendor invoice to verify purchase amounts and review market information on current
purchase price for inventory. Review current sales orders for sales value and for sales.

The physical inventory should be observed with the auditor:

• Inspect the inventory looking for slow-moving or obsolete items.
• Inspect inventory counting to ensure that all items are included in the account balances.
• Inquire of personnel regarding the salability of inventory items.
• Test count selected inventory items.
• Vouch items from the count sheet to the actual inventory item.
In addition, the auditor should trace sales to payments made on accounts receivable (the real measure of the
value of inventory is what someone will pay you for it).

Discovery Summary

Inventory and deferred cost overstatement: By performing the procedures outlined in the Audit Approach
section, the auditor may notice inventory gathering dust (indicating slow-moving items); test counts that are
inaccurate or whether items on the count sheet do not exist. In addition, a review of payments on accounts
receivable may indicate fictitious sales. Fictitious sales may involve no inventory or obsolete or unsalable
merchandise.

9-18
Chapter 09 - Production Cycle

9.57 Detecting Errors and Fraud

Auditing Procedures That Might Have Detected the

Effect on Financial Statements Misstatement

a. Total assets overstated; net As part of the roll-forward procedure, auditors would examine the
income overstated. entries to reduce inventory for the cost of sales.

b. Total assets overstated; net Locations should be visited for an inventory count on a surprise
income overstated. basis.

c. Total assets overstated; net Examination of purchase records should reveal that the
income overstated. automobiles were not purchased. Inquiry of the client about
consignments should also alert auditors to the presence of
consigned goods.

d. Total assets overstated; net Examination of purchase invoices should indicate that the pricing
income overstated. is by thousand feet. Also, comparison to prior periods should
show the large increase in the value of wiring.

e. Total assets overstated; net During the observation of the physical inventory, auditors should
income overstated. request that some boxes be opened. Also, purchase records should
indicate that each box has only six baseballs.

9-19
Another random document with
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The Project Gutenberg eBook of Aarteenkaivajat
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Title: Aarteenkaivajat
Kolminäytöksinen hölmöläiskomedia

Author: Larin-Kyösti

Release date: November 23, 2023 [eBook #72212]

Language: Finnish

Original publication: Hämeenlinna: Arvi A. Karisto, 1908

Credits: Tapio Riikonen

*** START OF THE PROJECT GUTENBERG EBOOK

AARTEENKAIVAJAT ***
AARTEENKAIVAJAT

Kolminäytöksinen hölmöläiskomedia

Kirj.

LARIN-KYÖSTI

Hämeenlinnassa, Arvi A. Karisto, 1908.

HENKILÖT:

JASKA, Ala-Hölmän isäntä.

JUSTIINA, hänen rakas vaimonsa.
EPRA, Ylä-Hölmän isäntä.
TIKKA, herrastuomari.
MESAKKI, Hölmölän puukellonsoittaja.
AARETTI AKIANTERI, arkkilaulujen tekijä.
MAAILMAN-MATTI.
KOPUTUS-LIISA, puoskariakka.
ANSU, kylän poika.
AMALIA, Epran veljentytär.
HÖLMÖLÄN KANSAA.
ENSI NÄYTÖS.

Hölmän talojen pihamaa, keskellä pieni aidattu ala. Taustalla

keskellä on luhdinsola ja portti, sen oikealla puolella perällä
saunarakennus, jossa on kaksi seinäaukkoa, vasemmalla sikolätti.
Oikealla sivulla on Ylä-Hölmän talonseinä ja kuisti, halkopino, sen
edessä pölkky ja jakkara. Vasemmalla sivulla on Ala-Hölmän
talonseinä, pieni kuisti, seinän vieressä rahi, kuistin takana
vasemman nurkan puolella on puinen ruokakello kellohattuineen ja
tolppineen, sitä vastaan on nostettu tikapuut. — Rakennukset ovat
ränstyneitä puuröttelöitä.

Hölmöläisten hiukset ovat takaapäin ikäänkuin kirveellä tasoitetut,

puvut ovat kummallisia ja vanhanaikuisia, päässä isolippaiset
vannelakit, säärillä säämiskänahkaiset housut, puukengät y.m.

Jaska nukkuu rahilla kalahaavi kädessä, huivi päässä, joka on

soljunut niskaan, samoin Epra jakkarallaan nuokkuen kädessä
makkaratikku. Mesakki kulkee toisen luota toisen luokse kädessä
unisauva, jonka päässä on tiuku tai pieni kello, hän kohottaa keppiä
mutta laskee sen taas maahan, käy ja naureskelee itsekseen.
 TIKKA (Tulee solaportista. Mesakki kääntyy äkkiä ympäri). Niin,
älä kursastele, Mesakki, astu sinä vaan lähemmäksi.

MESAKKI. Katsokaas…

TIKKA. Vaikka minulle korkea laki ja oikeus onkin antanut korkean

ja sangen tärkeän arvon.

MESAKKI (Näyttäen keppiään). Hehe, kuulkaas, kepsautanko

noita unisauvallani hiukan kylkeen?

TIKKA. Mutta minä en ole tähän arvoon pyrkinyt lankouden, en

heimolaisuuden, lahjain eli antimitten, pelvon, vihan, hyödytyksen eli
vahingon tähden eli mitä se olla mahtais. Mesakki, minä en silti
tahdo sinua ylönkatsoa, alanhan minä jo tähän herrastuomarin
arvoon tottua.

MESAKKI (Kumartaen kateellisesti). Vai herrastuomari, jaa. Mikä

kunnia
Hölmölän kylälle. Mutta katsokaas, arvon herrastuomari, kuinka
nämä
Hölmölän naapuri-isännät nukkuvat kuin näkinkodat auringon
paisteessa
ratki raukeevat.

TIKKA. Mikä kaunis perikuva.

MESAKKI. Mutta synnin uni on liian makia, liian makia, herra

herrastuomari.

TIKKA. Uni on taivaan lahja, ei siinä syntiä ole.

 MESAKKI. Mutta herrastuomari, eikös siitä mahda suuttua
isämme perkele, joka käy ympäri kuin lohikäärme.

TIKKA. Sanos muuta, sanos muuta, sinä olet hurskas hengen

mies,
Mesakki, ja sinulla on sen arvomerkitkin.

MESAKKI (Näyttää sauvaansa). Niin, tämä "huutavan ääni". Tällä

unisauvallani olen minä unilukkarina ollessani jo monta vuotta
herättänyt kirkossa nukkuvia sieluja.

TIKKA. Sinä herätit tavallisesti vaimoja, Mesakki, no, en mene

sanomaan että sinä sentähden olisit menettänyt virkasi, en suinkaan,
enkä väitä sitäkään, että olisit nautiskellut liiaksi pyhää viiniä.

MESAKKI. Ihminen on vaimosta syntynyt, ja petollinen on hänen

kielensä. — Hyvää parjataan aina. Mutta katsokaas näitä tässä,
niskureita he ovat ja eripuraisia.

TIKKA. Mutta nyt loppuu tämä hölmöläisten vanha riita, sillä

meidän kylään kuuluu nyt tulevan oikein riikin maanjakaja.

MESAKKI. Oikeinko riikin maanjakaja?

TIKKA. Niin, kun minä panen ajatukseni kapulan kiertämään, ei se

äkkiä pysähdykään.

MESAKKI. Niin, herra herrastuomari, te ette luekaan lakia niinkuin

piru raamattua, ja perämela se suuretkin laivat ohjaa.

EPRA (Puoliunessa). Taas tuli makkaratikku!

 JASKA (Herää, vetää nuorasta ja kahmasee haavillaan). Sik… sik,
mene jorsaile! Kas, tässä on nuora, mutta missä porsas?

EPRA (Herää). Sinäkö se siinä oletkin senkin jöllikkä, porsaan

paimen.

JASKA. Mitähän se lintu syö, joka noin koreesti laulaa.

Makkaratikun veistäjä!

MESAKKI. Missä on miehuutesi merkki, Jaska, koska akan huivi

on niskassasi?

JASKA. Akka pani porsasta vahtimaan ja piiloitti vannelakkini, vei

vielä äkkiväärän piippunikin. (Pistää huivin taskuunsa.)

TIKKA. Mies tehköön miehen töitä ja akka tehköön akan töitä,

kuten luonnossa ja laissa säätty on.

JASKA. Mutta kun se meidän akka on niin yksioikonen ja äksy…

Suutahti ja lähti tästä peltotöihin ja pani minut voita kirnuamaan.

EPRA (Haukotellen). Minäpä näin kummallisen unen… Mies

nostaa jalkojaan Hölmölän kylää kohden ja kantaa kuollutta
selässään.

JASKA. Mutta minä näin vielä merkillisemmän unen. Mies ajaa

evankeliumivaljailla riikinkukonhöyhenpatjoilla kaksi aasintammaa
edessä.

EPRA. Älä sinä mene näkemään minun uniani.

JASKA. Kyllä minä aina näen parempia unia kuin sinä.

MESAKKI. Kuulkaas arvon herrastuomari…

 EPRA ja JASKA (Nousevat ja kumartavat). Herrastuomari?

MESAKKI. Eikös ole merkillinen tämä unien yhtäpitäväisyys, se

tietää jotakin. Aaretti Akianteri sen selittää taitaisi.

TIKKA. Niin, hän sen saattaisi selittää! Akianteri on Hölmölän

suurin rekilaulumestari ja hän tutkii naisrohveetta Sipillan
ennuskirjaa.

MESAKKI. Missä askartelee nyt suuren miehen aatos.

TIKKA. Akianteri rustailee suurta paimenveisua, istuu meidän

lammaskarsinassa ja määkii.

JASKA. Niin oikein, että saisi ne oikeat niksit, tahdit ja temput, niin
oikein.

TIKKA. Ja sitte tutkiskelee hän kai sitä ikiliikkujaansa.

EPRA. Onko jo henki tullut hänen päällensä.

TIKKA. Kun henki tulee hänen päällensä, niin alkaa hän raivota,
lyö rikki kaikki mitä eteen sattuu.

MESAKKI. Me tiedämme sen, silloin me telkeemme hänet

saunaan, niin, kaksi päivää istui hän siellä jälkeen viime
tappijuhlankin, mutta siitä tulikin oikein metka arkkiveisu eikä sitä
tuhman hanhen kynällä olekaan kirjoitettu.

TIKKA. Mutta minusta merkitsee näiden rehellisten Hölmölän

isäntien uni sitä, että sopu ja rauha nyt palaa kunnialliseen
kyläämme, olkoon se heille ojennusnuorana huoneen hallituksessa.
 MESAKKI. Niin, olettekos kuulleet vastalkuja, meidän kyläämme
tulee riikin ylimaanmittaaja.

JASKA ja EPRA (Kavahtavat pystyyn). Maanmittaaja!

MESAKKI. Ja sitten kaikessa sovinnossa kumoon kaikki pyykit ja

aidat!

EPRA. En minä sovinnolla.

JASKA. Enkä minä. Sillä tämä on taatani perimysmaata.

EPRA. Mutta jo minun taatani taata sen aitasi.

JASKA. Niin oikein, mutta omin luvin.

MESAKKI. Voi, voi, eihän tässä ole kysymys kuin kahden

kyynärän suuruisesta maatilkusta.

EPRA. Tilkku kuin tilkku, tuuma ja tikki, jollei pidä, niin menköön
rikki.

JASKA. Tikuta ja takuta, mutta kyllä se maanjaossa määrätään

minulle.

EPRA. Mutta minä selitän sille mittarille, että lain pykälä on minun
puolellani.

TIKKA. Hiljaa, hyvät naapurit ja riitaveljekset. Te ette näy tietävän,

mikä on lain perustus ja ymmärrys. Pahaa elköön pahemmalla
parattako. Lain pykälä kuuluu minulle, sentähden on minulle tämä
uusi arvokin annettu vaikka alanhan minä jo siihen tottua. Ja tämä
olkoon nyt sanottu teille vähäiseksi ojennukseksi.
 MESAKKI. Tehkää kuten herrastuomari käskee, älkää enään
puskeko yhteen kuin vihaiset, kippurasarviset tallipässit.

JASKA. Enhän minä, mutta se Epra leksottelee aina.

EPRA. Kyllähän minä sopisin, mutta se Jaska.

MESAKKI. Miettikäämme, kuinka paraiten vastaanotamme kalliin

vieraamme.

JASKA. Mutta eikös pitäisi ensin panna se koetukselle, jollei se

ajakaan vaunuissa…

TIKKA. Niin, olkaamme varovaisia.

EPRA. Jalkaisin se tulee kuin kostjumalan kauppias, sen näin

minä unessani.

TIKKA. Niin, käyvät ne riikin isot herrat joskus jalkasinkin ja

valepuvussa, sillä siten ne pääsevät paremmin riita-asioitten ja
aivoitusten perille.

ANSU (Tulee juosten). Kuulkaas, naapurikylässä on sellainen

merkillinen mies!

EPRA. Hää!

JASKA. Hää!

TIKKA. Mene heti näyttämään sille korkealle herralle tietä tänne.

ANSU (Töllistellen). Korkealle herralle?

JASKA. Mene kun käsketään! (Ansu menee.)

 MESAKKI. Mitäs nyt sanotte, Hölmölän naapurit ja kylänmiehet?

EPRA. Me vaikenemme.

JASKA. Me vaikenemme.

TIKKA. Lyökäämme siis viisaat päämme yhteen. (Kaikki nostavat

etusormensa otsalle. Epra ja Jaska lyövät päänsä yhteen.)

MESAKKI. Noin! Nyt voima nousi päähänne kuin vanha terva

kuivaan puuhun.

TIKKA. Niin, ja nyt minä menen Aaretti Akianteria puhuttelemaan.

(Menee.)

MESAKKI. Ja minä vahtaan luhdinsolasta ja hoitelen täällä

samalla nurkantakusianne. (Kulkee vähä väliä portilla.)

EPRA. Minä rupeen taas veistämään makkaratikkuja.

JASKA. Ja minä rupeen kirnuamaan ja sitten laitan minä

tynnyrintappia.

MESAKKI. Se on oikein se, kun ensin syntyy tappi, niin syntyy

sitte tynnyrikin.

JASKA. Niin, ahkeruus on ilomme.

EPRA. Jaa'a. Halkopinoni pienenee.

MESAKKI. Meidän voit ja pellavat, naskalit, tapit ja makkaratikut

alkavat jo olla maan mainioita. Niin ahkeroitkaamme tässä surun
laaksossa, niin kunnian kukko kiekuu kerran haudallammekin.
 JASKA. Niin, ja nähköön se riikin herra, ettei täällä eletä kuin
viimeistä päivää niinkuin pakanat ja murjaanit.

MESAKKI. Ja jos sattuisitte hiukan nukahtamaankin, niin, niin,

kyllä minä huutavan äänellä kopistan korvanne hörölle.

JASKA. Mesakki, sinä olet meidän hyvä omatuntomme. (Sitoo

kirnun selkäänsä ja kulkee edestakaisin.) Kuulkaas, kuinka se
molskaa!

EPRA. Katsokaas, kuinka tuli hyvä makkaratikku, mutta siihen

menikin kokonainen halko.

JASKA. Mesakki, ole valppeellinen, eiköhän jo näy vaunujen

tomupilveä raitilla.

MESAKKI. En näe muuta kuin että muijasi huuhtoo kaskessa, ajoi

äsken siat aitaukseen.

JASKA. Niin oikein, meidän akka on tomera ja visu vaimoihminen.

Katsos sillä lailla me yksintein palvaamme ja savustamme siat
elävinä ja sitte me teurastamme ne.

MESAKKI. Niin, ei meidän ymmärryksemme kasvakaan alaspäin

kuin vasikan häntä.

EPRA. Taas tuli makkaratikku!

JASKA. Kyllä meillä metsää riittää.

EPRA. Ha? Mitä metsästä, kunhan vaan tulee hyviä

makkaratikkuja.
 JASKA. Ai, ai, minä en tahdo olla huonompi kuin akkanikaan, minä
juoksen vettä hakemaan rannasta, samalla se voikin valmistuu
kirnussa. (Menee.)

MESAKKI. "Ruomi röykkiä kuin kätes käynyt", veisataan.

Muistakaamme se,
Epra, ja heittäkäämme viha, lihan himo, silmäin pyyntö ja elämän
koreus.

EPRA. Niin, ihminen on kuin makkaratikku, joka tuleen viskata

taitaan.

MESAKKI. Eijaa! Rohvaise itses, Epra, ja sinun sielus juur iloisest

jupileeraa ja sydämmes sangen suloisest triumveeraa.

EPRA. Ha. "Tässä surkiass' alhoss". Mutta perh… katkesi

makkaratikku.

JUSTIINA (Tulee miehen saappaissa piippu suussa). Jukravita,

missä on
Jaska ja missä porsas!

MESAKKI. Tuolta se jo tulla jumppii rannasta.

JASKA (Tulee). Rakas vaimoni Justiina, mikä onnettomuus!

JUSTIINA. Ei se tule kello kaulassa. Mutta niinhän sinä olet kuin

hyypiä hävitetyssä kaupungissa.

JASKA. Mutta se on lohdukseni, että sinun on käynyt paremmin.

Joko latasit pellon?

JUSTIINA. Mitäs minä… toin hevosen pellolta sotkemasta.

 JASKA. Entäs ne palvatut siankinkut, jo herahtaa vesi kielelleni.

JUSTIINA. Palvasin, palvasin, poroksi ne paloivat kaikki.

JASKA. Vest ja varjele! Ja minun voini luiskahti järveen

kumartuessani.

JUSTIINA. Senkin höömeli! Missä on huivini?

JASKA. Anna minulle takaisin miehuuteni merkki, mitäs se riikin

maanjakaja sanoisi, jos minä kulkisin omalla pihallani niinkuin
kananvaras.

EPRA. Omalla pihallasi?

JUSTIINA. Tuossa on lakkisi, piippusi ja massisi, ja sen minä

sanon, että et sinä toista kertaa kirnua.

JASKA. Hei riemua, nyt on elämä taas kuin silkkiä! Rakas vaimoni
Justiina, kirnua sinä joka lypsätkin. (Panee tupakan.)

MESAKKI. Niin, palakoon omille töilleen kukin, kust keskenäm

tehdä tienem. — Ja sinä Justiina, pane pata tulelle ja pöydälle pötyä
parasta, sillä kohta tulee tänne oikein isoinen riikinjakaja. — Minä
kiipeen kellohattuun katsomaan. (Kiipee tikapuille.)

JUSTIINA. Tulkoon vaan ja potkaiskoon sen vanhan, mädän

aidan, että tässä pääsisi kunnolla liikkumaan.

EPRA. Ei sitä vaan niin potkaista minun aitaani.

JASKA. Aita olkoon sinun, mutta maa on minun.

 JUSTIINA. Niin, kyllä siitä jo on käräjät käyty mokomastakin.
Kaivaisitte edes kaivon siihen.

MESAKKI. Ja samalla löytyisi ehkä se arkku täynnä vieraan maan

rahoja ja se suuren sotakenraalin kultasapeli.

JUSTIINA. Vielä mun mitä. — Meidän miehet on niin laiskoja että

hävettää.

EPRA. Ha. Ilman minun lupaani ei sitä kukaan kaiva.

JUSTIINA. Kaiva, sanot. Sinä naimaton nahjus, kitupiikki pöykäri.

JASKA. Hihhihhii!

EPRA. Ha, sinä ahkera mutta kuitenkin ahtera Jaskan rakas

Justiina. Muistatko, kuinka sinä eräänä kesäyönä riisuit itsesi
ihkasen alasti meidän pellolla ja ripottelit alastomalle ruumiillesi
multaa ja veit sen sitte kotiin, mutta et vienyt kylvöonnea, et vienyt.

MESAKKI. Soh, soh, mikäs on teidän ollessa yksillä pihoilla.

JUSTIINA. Sinä turkki! Älä syötä pajunköyttä. Sen teki Koputus-

Liisa, jollen väärin muista, sama juuri, se sinun vanha remmasi.
Ahneutesi takia et akottunut. — Niin, niin, kyllä minä tiedän, kun
muijat kuuluttaa, niin sika vihkii.

EPRA. Jo söi musta sika eväät. — Mutta minä en panekaan

sahran varsia ja kirveitä sänkyni alle niinkuin veljeni Jaska.

MESAKKI. Hehe, että poika tulisi.

EPRA. Hojota sitä nyt koko maailmalle.

 MESAKKI (Huutaa). Hoi, jo tulee, jo tulee!

JASKA. Soita puukellolla!

MESAKKI. Silloin vasta soitan, kun hätä on Hölmölässä.

JASKA. Soitithan silloinkin kun Epran housut paloivat!

EPRA. Sinä niihin tulen päästit piipustasi.

JUSTIINA. No sun tuhatta mujua! Mikäs teitä rikeeraa! Jaska,

joutuun porsasta hakemaan, minä rupeen tekemään makkaroita!
(Menee tupaan.)

EPRA. Ja minä makkaratikkuja!

JASKA. Vaunuissako se ajaa ja aasilla?

MESAKKI (Kiipee alas). Jalkaisin se tulee, varmaankin ovat

vaunut menneet rikki.

EPRA. Sitähän minäkin.

MESAKKI. Mutta olkaamme varuillamme.

EPRA. Niin, olkaamme varuillamme.

JASKA. Tutkikaamme ensin.

MESAKKI. Voi, esivalta, rauha ja hyvä hallitus! Olisipa täällä nyt

herrastuomari tai Akianteri, minä en ole koskaan vastaanottanut
muita kuin piispoja ja… (Näyttämön takaa kuuluu laulun renkutusta.)
Jaska, Epra, lakit pois päästä ja pyyhkikää nenäänne!
 MAAILMAN-MATTI (Tulee iloisesti puettuna hiukan kuluneihin
vaatteisiin.
Selässä pieni kuvakaappi. Puhuu kujaan ikäänkuin koiria luotaan
ajaen.
Ansu kantaa lintuhäkkiä).

"Ei se luuta ole, sanoi mies, kun koira puri puujalkaa". Luuletko
sinä, etten minä parempia päiviä ole nähnyt. Huuti!

JASKA. Se on hän!

EPRA. Sama, jonka minä näin unissani.

MAAILMAN-MATTI. Rauha parhaaks! Mitäs te töllistelette?

EPRA. Ha, jaa että me töllistelemme.

JASKA. Alamaisin palvelijanne.

MESAKKI. Me emme odottaneet teitä näin pian.

MAAILMAN-MATTI. Mitäh!

JASKA. Ette tulleetkaan vaunuilla.

MAAILMAN-M ATTI. Hahhaa! Olen minä ajanut vapaalla

kyydilläkin. Missä se minun liehtarini on? Aseta häkki tuohon!

MESAKKI. Tulitte ennen kuriirianne. Kuinka on kalliin terveytenne

laita.

MAAILMAN-MATTI. Ain pystyss kuin kerjäläisen keppi. — Mutta

mikäs tämän kylän nimi on?