Learning Objectives

Develop an understanding of the inventory management process.

Identify and describe the types of documents and records used in the inventory management process.

Understand the functions in the inventory management process.

Know the appropriate segregation of duties for the inventory management process.

Identify and evaluate inherent risks relevant to the inventory management process.

Assess control risk for the inventory system.

Identify key internal controls and develop relevant tests of controls for inventory transactions.

Relate the assessment of control risk to substantive procedures.

Identify substantive analytical procedures used to audit inventory and related accounts.

Know how to audit standard costs.

Know how to observe physical inventory.

Identify tests of details of transactions used to audit inventory and related accounts.

Identify tests of details of account balances used to audit inventory and related accounts.

Evaluate the audit findings and reach a final conclusion on inventory and related accounts.