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  • Physical Inventory Obsevation

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    Wawex Davis
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    The document discusses three aspects of physical inventory observation: completeness, accuracy, and classification. It notes the importance of tagging inventory for completeness checks and inquiring about inventory stored in other locations. For accuracy, auditors should recount sample items and trace inventory in both directions. Classification involves examining tags for key details and assessing percentage of completion for work-in-process inventory.

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    Physical Inventory Obsevation

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    The document discusses three aspects of physical inventory observation: completeness, accuracy, and classification. It notes the importance of tagging inventory for completeness checks and inquiring about inventory stored in other locations. For accuracy, auditors should recount sample items and trace inventory in both directions. Classification involves examining tags for key details and assessing percentage of completion for work-in-process inventory.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    6 views3 pages

    Physical Inventory Obsevation

    Uploaded by

    Wawex Davis
    The document discusses three aspects of physical inventory observation: completeness, accuracy, and classification. It notes the importance of tagging inventory for completeness checks and inquiring about inventory stored in other locations. For accuracy, auditors should recount sample items and trace inventory in both directions. Classification involves examining tags for key details and assessing percentage of completion for work-in-process inventory.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    Physical Inventory Observation: Completeness

    • Tagging inventory

    • If tags are not used

    • Enquire as to inventory in other locations.

    Inventory 1
    Physical Inventory Observation: Accuracy

    • Recount client’s counts


    • What should be in the auditor’s sample?

    • Should also trace inventory in both directions.

    • Perpetual inventory master file

    • Record client counts test-counted for subsequent testing.

    Inventory 2
    Physical Inventory Observation: Classification

    • Examine inventory tags:


    • What to look for?

    • How about percentage of completion for work-in-process?

    Inventory 3

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