ACC492 Week 3 Current Article Summary.docx ACC/492 Week 3 - Current Issue Summa

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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 au... dit 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . . [Show More]

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