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ACC492 Week 3 Current Article Summary.docx ACC/492 Week 3 - Current Issue Summary Acc/492 Week 3 €“ Current Issue Summary The word audit can be scary to a business owner, whether the audit is for internal purposes or at an external auditor$7.49
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ACC492 Week 3 Current Article Summary.docx ACC/492 Week 3 - Current Issue Summary Acc/492 Week 3 €“ Current Issue Summary The word audit can be scary to a business owner, whether the audit is for internal purposes or at an external auditor
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RAS
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Rasmussen College
ACC492 Week 3 Current Article S ACC/492 Week 3 - Current Issue Summary Acc/492 Week 3 €“ Current Issue Summary The word audit can be scary to a business owner, whether the audit is for internal purposes or at an external auditor's request. It is essential to understand an inventor...
acc492 week 3 current article summarydocx acc492 week 3 current issue summary acc492 week 3 €“ current issue summary the word audit can be scary to a business owner
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ACC/492
Week 3 - Current Issue Summary
Acc/492
Week 3 – Current Issue Summary
The word audit can be scary to a business owner, whether the audit is for internal
purposes or at an external auditor's request. It is essential to understand an inventory
audit's nuances ahead of time to prepare you for what is to come. The audit cycle for
inventory is divided into five activities: (i) acquire and record raw materials, labor, and
overhead. (ii) internally transfer assets and costs, (iii) ship goods and record revenue and
expenses, (iv) physically observe inventory, and (v) price and compile an inventory.
An inventory audit is when you or an auditor uses analytical procedures to check
the company's inventory methods and confirm the financial records and actual count of
goods match. The inventory audit's importance is to maintain accuracy, ensure you have
the right amount of stock on hand, and spot shrinkage, which allows for a smooth-
running operation.
Auditing procedures that are included in the audit are physical inventory counting.
When conducting a physical inventory, you must count each piece to account for all items.
Physical counting is time-consuming, so many businesses use technology (inventory
management systems) such as barcode scanners to track and account. When an auditor is
present, they will want to observe the process and reconcile it with your general ledger.
Inventory layers are FIFO and LIFO; if so, you need to make sure they are valid. Also, ABC
analysis for high-value item inventory; A items is top tier, B is mid-tier, and C is low-tier.
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