Transcript Audit Field Standards: Audit of Inventory Session 11

Audit Field Standards:
Audit of Inventory
Session 11
Learning Objectives
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Understanding Audit Field Standards of Audit of
Inventory
Understanding Internal Control of Inventory
Understanding Audit Objectives of Inventory
Being able to design Audit Procedures of
Inventory
Understanding of Documents (evidence) to
support the records of Inventory
Audit Evidence of Purchasing and Inventory
Confirmation about Inventory
Some Frauds involving Inventory
Examples of Audit Findings of Inventory
SPAP – SA Seksi 331
SA 331 – 03 sd 07 – Pengamatan
thd Penghitungan Fisik Sediaan
 SA 331 – 08 – Sediaan yang berada di
Gudang Umum
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(Tugas: Mahasiswa membuat resume dan
mempresentasikannya dengan beberapa
kemungkinan penyimpangan yang
mungkin terjadi)
The Internal Control Objectives of
Inventory
Inventory purchased are needed
 Inventory is stored safely in good storage/
warehouse (warehouse is physically good)
 Inventory is prevented from theft (warehouse
is a closed area for unauthorized persons)
and breaking down
 Inventory is stacked manageably and easy
to be taken out.
 Inventory is maintained in a sufficient
balance.
 Inventory is classified accordingly
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Activities Need to be Examined
Requesting of purchase activity
 Receiving activity (The way of receive)
 Moving out activity
 Storing/stacking activity
 Packing activity
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Audit Procedures of Inventory
are the steps to be done sequentially to
achieve the audit objectives
Audit Objectives of Inventory
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Transaction Audit Objectives
 Occurrence
 Completeness
 Accuracy
 Cut off
 Classification
Balance Audit Objectives
 Existence
 Completeness
 Right and Obligation
 Valuation and Allocation
Audit Objectives of Inventory
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Disclosure Objectives
 Occurrence
 Right and Obligation
 Completeness
 Classification and Understandability
 Accuracy and Valuation
(Boynton, Modern Auditing 8 edition)
Documents (evidences) to support
the records of Inventory
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PR (Purchase Requisition)
PQ (Purchase for Quotation
Bid Evaluation
Contract or Agreement Letter
PO (Purchase Order)
RR (Receiving Report)
DO (Delivery Order of supplier)
Invoice of supplier
Purchase Return Document
Good Using Document
Audit Evidence of Inventory
Inquiries of the client
 Documentation
 Confirmation
 Observation
 Physical examination
 Analytical procedures
 Reperformance
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Confirmation about Inventory
Some Frauds in Inventory
Over or under stating the value of
Inventory
 Misclassifying Inventory
 Scrapping good inventory
 Stealing inventory
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Examples of Audit Findings of
Inventory
Condition
 Criteria
 Causes
 Effects
 Recommendation
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