controls addresses completeness assertion inventory

Which of the following controls most likely addresses the completeness assertion for inventory

73. Which of the following controls most likely addresses the completeness assertion for inventory? a. Work in process account is periodically reconciled with subsidiary records b. Employees responsible for custody of finished goods do not perform the receiving function c. Receiving reports are prenumbered and periodically reconciled d. There is a separation of duties between payroll department and inventory accounting personnel

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Last Updated on January 31, 2022 by Admin 3

  • AUD CPA : All Parts

  • Work in process account is periodically reconciled with subsidiary records.
  • Employees responsible for custody of finished goods do not perform the receiving function.
  • Receiving reports are prenumbered and periodically reconciled. 
  • There is a separation of duties between payroll department and inventory accounting personnel.

Explanation:
Choice “C” is correct. The internal control procedure of prenumbering receiving reports and periodically reconciling them to the inventory records most likely addresses the completeness assertion for inventory, because it allows the auditor to determine whether all goods received have been recorded as inventory.
Choice “A” is incorrect. Reconciling the work in process account (per the general ledger) with subsidiary records (direct materials, direct labor, overhead) tests that those records are interfacing properly, but does not provide any information about the completeness assertion for inventory.
Choice “B” is incorrect. Separation of employees responsible for custody of finished goods from the receiving function addresses the safeguarding of assets, not the completeness of the inventory records.
Choice “D” is incorrect. The separation of duties between the payroll department and inventory accounting personnel is related to the valuation (pricing) of inventory, not its completeness.

  • AUD CPA : All Parts

  • School La Salle University
  • Course Title BSA 04
  • Pages 39
  • Ratings 100% (1) 1 out of 1 people found this document helpful

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197. Which of the following controls most likely addresses the completeness assertion forinventory?a.Work in process account is periodically reconciled with subsidiary records.b. Employees responsible for custody of finished goods do not perform the receivingfunction.c.Receiving reports are prenumbered and periodically reconciled.d. There is a separation of duties between payroll department and inventory accountingpersonnel.

198. Which of the following controls most likely would be used to maintain accurate inventoryrecords?

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199. A weakness in internal control over recording retirements of equipment may cause an auditorto

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200. The primary responsibility of a bank acting as registrar of capital stock is to

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201. With well-developed internal control, employees in the same department most likely wouldapprove purchase orders, and alsoa.Reconcile the open invoice file.c.Authorize requisition of goods.b.Inspect goods upon receipts.d.Negotiate terms with vendors.

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  • School Academy of Business Computers (Karimabad), Karachi
  • Course Title CS 101
  • Type

    Test Prep

  • Pages 531
  • Ratings 90% (31) 28 out of 31 people found this document helpful

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50.Which of the following internal control activities most likely addressesthe completeness assertion for inventory?A.The work-in-process account is periodically reconciled with subsidiaryinventory records.B.Employees responsible for custody of finished goods do not performthe receiving function.C.Receiving reports are prenumbered and the numbering sequence ischecked periodically.D.There is a separation of duties between the payroll department andinventory accounting personnel.AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: Apply

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Difficulty: 3 HardLearning Objective: 09-02 Give examples of tests of controls over conversion of materials and labor in a productionprocess.Source: AICPATopic: Production Controls51.When auditing inventories, an auditor would least likely verify thatA.All inventory owned by the client is on hand at the time ofthe count.B.The client has used proper inventorypricing.C.The financial statement presentation of inventories isappropriate.D.Damaged goods and obsolete items have been properlyaccounted for.AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: ApplyDifficulty: 3 HardLearning Objective: 09-03 Identify and describe considerations involved in the observation of physical inventoryand tests of inventory pricing and compilation.Source: AICPATopic: Inventory Testing52.A client maintains perpetual inventory records in quantities and indollars. If the assessed control risk is high, an auditor would probablyA.Apply gross profit tests to ascertain the reasonableness of thephysical counts.B.Increase the extent of tests of controls relevant to theinventory cycle.C.Request the client to schedule the physical inventory count at theend of the year.D.Insist that the client perform physical counts of inventory itemsseveral times during the year.AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: ApplyDifficulty: 3 HardLearning Objective: 09-03 Identify and describe considerations involved in the observation of physical inventoryand tests of inventory pricing and compilation.Source: AICPA

Topic: Inventory Testing53.An auditor selected items for test counts while observing a client'sphysical inventory. The auditor then traced the test counts to theclient's inventory listing. This procedure most likely obtained evidenceconcerning management's balance assertion ofA.Rights andobligations.B.Completeness.C.Existence.D.Accuracy andvaluation.AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: ApplyDifficulty: 2 MediumLearning Objective: 09-03 Identify and describe considerations involved in the observation of physical inventoryand tests of inventory pricing and compilation.

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The Land, Financial audit, invoice, AACSB, Purchase order

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Which of the following internal control activities most likely addresses the completeness assertion of inventory?

Which of the following internal control activities is most likely to address the completeness assertion for inventory? The work-in-process account is periodically reconciled with subsidiary records.

What control activities can an entity use to prevent unauthorized inventory production?

The following control activities can be used by the entity to prevent unauthorized inventory production: Preparation and review of an authorized production schedule. Use of material requirements planning and/or just-in-time inventory systems. Review of inventory levels by the inventory management department.

Which of the following is not a role of the inventory management function not the inventory management process as a whole?

Which of the following is not a role of the inventory management function (not the inventory management process as a whole)? D) Issuance of purchase requisitions.

Which of the following is true about the auditors observation of the client's physical inventory?

Which of the following is true about the auditors' observation of the client's physical inventory? The auditors should evaluate the adequacy of the client's counting procedures.

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