Audit techniques of inventories transactions.

Select the following which correctly answers types of inventories.

• Raw materials, work-in-progress, finished goods
• Raw materials, inventory, stock
• Finished goods, by-products, waste materials
• Raw materials, work-in-progress, semi-finished goods

State 3 methods of inventory valuation.

• Random Selection method
• First In, First Out (FIFO) method, Last In, First Out (LIFO) method, Weighted Average Cost method
• First In, Last Out (FILO) method
• Specific Identification method

These are the examples of inventory manipulations :

• Proper record keeping of inventories

• Third party valuation check

• Overstating/

  Understating Inventory, Inventory Write-offs, Off-balance sheet inventory

• Good internal control management

Good internal control management of inventories in warehouse are indicated by :

• Encouragement of theft or loss
• Delayed identification of discrepancies
• Accurate tracking of stock levels, timely identification of discrepancies, prevention of theft or loss, and optimization of inventory turnover.
• Inaccurate tracking of stock levels

These are the audit examination procedures for inventories transactions.

• Observing physical count, testing accuracy of records, confirming inventory held by third parties, evaluating internal controls
• Verifying supplier invoices
• Reviewing employee attendance records
• Analyzing customer feedback