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Showing posts with label Auditing. Show all posts
Showing posts with label Auditing. Show all posts
July 20, 2023
May 2, 2019
Valuation and Verification of Closing Stock
The valuation of closing stock is the important factor in determining the operating result.
Cost accounting system if it exists in the company will give the value of closing stock. But if cost accounting system is not in place, then physical stock verification needs to be done in the stores as well as on the shop floor and finished good stores.
Stock taking is the procedure or process of physical verification of stocks at periodic intervals.
Persons undertaking physical verification should be different from those responsible for store-keeping in respect of those stocks.
The auditor has to obtain sufficient appropriate audit evidence to corroborate the management's assertions regarding closing stock.
- that all inventories owned by the entity recorded and all recorded inventories are owned by the entity.
- that all recorded inventories exist at the year-end under the ownership of the entity.
- that the stated basis of valuation of inventories is appropriate and properly applied, and that the condition of inventories is recognized in their valuation.
The procedures used in auditing of inventories are:
1. Examination of records
2. Attendance at stock taking
3. Obtaining confirmations from third parties regarding invetories in their premises.
4. Examination of valuation policies and procedures
5. Analytical review procedures.
Knol Number 469
Cost accounting system if it exists in the company will give the value of closing stock. But if cost accounting system is not in place, then physical stock verification needs to be done in the stores as well as on the shop floor and finished good stores.
Stock taking is the procedure or process of physical verification of stocks at periodic intervals.
Persons undertaking physical verification should be different from those responsible for store-keeping in respect of those stocks.
The auditor has to obtain sufficient appropriate audit evidence to corroborate the management's assertions regarding closing stock.
- that all inventories owned by the entity recorded and all recorded inventories are owned by the entity.
- that all recorded inventories exist at the year-end under the ownership of the entity.
- that the stated basis of valuation of inventories is appropriate and properly applied, and that the condition of inventories is recognized in their valuation.
The procedures used in auditing of inventories are:
1. Examination of records
2. Attendance at stock taking
3. Obtaining confirmations from third parties regarding invetories in their premises.
4. Examination of valuation policies and procedures
5. Analytical review procedures.
Knol Number 469
November 23, 2011
Audit Report
Audit Report
Management concepts knol Series
The management concept knols will have introduction to the concept, definition and brief explanation, links to various knols on the concept, books on the concept and research papers on the concept. Visitors are requested to add the research papers they are aware of and contribute to developing a good bibliography of research papers on the concept.Authors
Index of concepts
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8. Ha to Hz
9. Ia to Iz
10. Ja to Jz
11. Ka to Kz
12. La to Lz
13. Ma to Mz
14. Na to Nz
15. Oa to Oz
16. Pa to Pz
17. Qa to Qz
18. Ra to Rz
19. Sa to Sz
20. Ta to Tz
21. Ua to Uz
22. Va to Vz
23. Wa to Wz
24. Xa to Xz
25. Ya to Yz
26. Za to Zz
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Concept Definition and Explanation
Auditors of financial statements have to give a report to the shareholders of a company.
The report has to certify that the financial statement represent the true and fair view and that they are prepared in accordance with the provisions of GAAP and Companies act.
In case there are uncertainties and disagreements, auditors qualify the report and explain their interpretation of the situation. So a qualified audit report is a report with auditors opinion differing from the opinion of management regarding reporting of financial transaction and the financial position of the company.
In case there are uncertainties and disagreements, auditors qualify the report and explain their interpretation of the situation. So a qualified audit report is a report with auditors opinion differing from the opinion of management regarding reporting of financial transaction and the financial position of the company.
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Knols
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Related Knols
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Books
XYZ
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Research Papers
2008
2007
Management Knowledge Revision Knols
Knols that facilitate revision of various subjects of MBA curriculum to keep management professionals' knowledge fresh
Management knols of Narayana Rao are being posted in http://nraomtr.blogspot.com/ to develop the MBA revision handbook
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