CAT / FIA FAU Syllabus C. Internal Control - Inventory - Notes 5 / 9
The control objectives for inventory are:
as follows:
Inventory movements are recorded and authorised
Only items belonging to the client are included in inventory
Inventory records are accurate
Cut-off procedures are correct
Inventory is valued correctly
Inventory levels are neither too low nor too high
Liabilities are recorded accurately
Allowance is made for slow moving and obsolete inventory
Tests of Control - Inventory
These may include:
Ensuring environment suitably secure and safe
For a sample of inventory records and agree to GRN or GDN
Confirm that all movements are authorised
For a sample of GRN and GDN’s agree to inventory records
Test check inventory count and investigate discrepancies
Review sequentially numbered GRN and GDN for completeness
Attend inventory count to ensure it is carried out correctly
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