DESCRIPTION
This module focuses on procedures used to Audit inventory valuation and cutoff. The session begins with a discussion of acceptable methods of accounting for inventory under GAAP, including a discussion on standard costing. The focus then shifts from accounting for inventory to the Audit procedures commonly applied to test the various components of inventory, including raw materials and overhead.
LEARNING OBJECTIVES
• List costs typically capitalized as part of inventory
• Explain three methods for accounting for inventory
• Describe typical Audit procedures and approaches used to test inventory recorded cost, regardless of method
