For count procedures to be effective there should be at least one person who is independent of the regular storekeepers and the auditor that also does test counts. Out of 98 count sheets, only 7 were rechecked on a random basis without being pre-information to Apollo personnel.
Then the auditor should examine these instructions to verify their efficiency. Some pallets of shoes stacked near the back of the warehouse were covered with dust and looked very old.
In this case, Andrew Jacobs issued instructions to count inventory but he made no considerations to: Proper sampling needs to be done here.
Obsolete items and scrap stock Hand count instructions were followed by the count team. Write offs of excess or scraps should be valid and authorized first. The inventory is also at risk for physical deterioration.
However, the records show that 8, And when doing test counts, the auditor should give consideration to stocks that have high value. Refer to attachment 1 There also should be well designed procedures when it comes to identifying defective, damaged, obsolete, and slow moving inventory.
This instruction should be in writing. Stock in transit and process 3. Other observations I noticed was that original physical verification sheets were reviewed and some valuable items were traced and selected for the final inventories.
I also noticed that slow moving goods were purchased even though there were plenty of them in stock.
In this Company, employees were instructed that no sales and no movement of inventory was to take place during the count. This leads to risk of loss of obsolescence, and non-identification of inventory theft. Employees could also use inventory without authorized use or dispose of it.
There were no differences observed between the test counts and those counted by the client.View Test Prep - Observation Memo of Apollo Shoes from ACCT at University of Phoenix.
INTEROFFICEMEMORANDUM TO: SUBJECT: DARLENE WARDLAW TEAM A %(4). After you complete the inventory observation procedures you should compose a memo to summarize the audit procedures performed.
What information should you include in this summary? Definition. INVENTORY OBSERVATION MEMO 1. Before commencement of verification, the management should issue appropriate instructions to stock taking personnel.
Essays - largest database of quality sample essays and research papers on Inventory Observation Memo. Inventory Observation MEMO. Before verification, management should issue instructions to stock personnel that covers all phases of physical verification.4/4(1).
Free Essay: INVENTORY OBSERVATION MEMO 1. Before commencement of verification, the management should issue appropriate instructions to stock taking.Download