The audit of the inventory management process is affected by the audit results from multiple other processes. Identify the processes, other than the inventory management process, that affect the audit of inventory and explain how each affect the audit of inventory.
What will be an ideal response?
The inventory management process is affected by the control activities in the revenue, purchasing, and payroll processes. The revenue process accounts for the sale of finished goods. The purchasing process controls the acquisition and payment for inventory. The payroll process affects the costs of direct and indirect labor that is assigned to inventory. (See Figure 13-1 of the textbook for a diagram of the relationship between the processes.)
You might also like to view...
A(n) ________ is a government ban or restriction on the amount of a specific currency that is permitted to be traded or purchased
A) tariff B) exchange control C) quota D) barter E) franchise
____ earnings this quarter exceeded the expectations of many stockholders
A) IBMs B) IBM's C) IBMs'
The crash cost per period is computed as: (crash cost - standard cost)/(standard time - crash time)
Indicate whether the statement is true or false
Ethan, the president of Financial Investments, Inc. (FII), and Gina, FII's accountant, are charged with a crime, after the police search FII's offices. Under the exclusionary rule
A. certain FII records are excluded from subpoena by the government. B. certain parties to a criminal action may be excluded from a trial. C. illegally obtained evidence must be excluded from a trial. D. persons who have biases that would prevent them from fairly deciding the case may be excluded from the jury.