Chapter 11, Problem 43RSCQ

a.

To determine

Introduction: Inventories are complex items, which are subject to manipulations. In a business corporation variety of inventories are procured or manufactured having different shapes, sizes, and different values. So it is very important to place a well-established procedure to keep an eye on these manipulations.

Major deficiencies and inefficiencies present in the process.

b.

To determine

Introduction: Inventories are complex items, which are subject to manipulations. In business corporations,a variety of inventories procured or manufactured having different shapes, sizes, and different values. So it is very important to place a well-established procedure to keep an eye on these manipulations.

Steps required to improve the process.

c.

To determine

Introduction: Inventories are complex items, which are subject to manipulations. In business corporations,a variety of inventories procured or manufactured having different shapes, sizes, and different values. So it is very important to place a well-established procedure to keep an eye on these manipulations.

The importance to have segregation between purchasing, receiving and payment function.

d.

To determine

Introduction: Inventories are complex items, which are subject to manipulations. In business corporations,a variety of inventories procured or manufactured having different shapes, sizes, and different values. So it is very important to place a well-established procedure to keep an eye on these manipulations.

Preliminary assessment of control risk, substantive testing of related account balances, substantive procedures related to the audit of inventory, expense, payables, and other related accounts.