Day: December 28, 2021

In the field of building construction, a contract may sometime extend over two or more years. When that happens, it is necessary to value the work-in-progress at the end of each year. In such a case, it would obviously be Read More …

Where some of the goods are in bond, it is usual to have separate stock sheets for them. The particulars of stock entered on them should be examined by reference to bond warrants. If the same are pledged with some Read More …

The auditor should ensure that any goods sent to customers on approval which were unsold at the close of the year have not been treated as sold and are shown in the account as Stock on Approval and are valued Read More …

Where a separate account in respect of each consignment is not being maintained and only memoranda accounts in respect of goods sent on consignment are kept, the auditor should make sure that stocks sent out on consignment but unsold have Read More …

1. Clause 4(ii)(a) requires the auditor to comment whether the management has conducted physical verification of inventory at reasonable intervals. According to Accounting Standard (AS) 2, “Valuation of Inventories”: “Inventories are assets: held for sale in the ordinary course of Read More …

In addition to the audit procedures discussed above, the following analytical review procedures may often be helpful as a means of obtaining audit evidence regarding the various assertions relating to inventories : reconciliation of quantities of opening stocks, purchases, production, Read More …