Basic Staff Training: Inventory & Cost of Goods Sold Audit Concepts

Author: Robert K Minniti

CPE Credit:  2 hours for CPAs

Are you going to perform an audit on inventory & cost of goods sold? Whether you are a new auditor or just need a refresher on this topic this course is for you. We will review the auditing standards and look at best practices for auditing inventory & cost of goods sold.

This session will prepare help the staff auditor know what to do and why. In addition, it will also help the senior accountant be better prepared to know how to plan the audit procedures as well as review the work of the staff in this important audit area.

Many auditors are so busy they don’t have the time to understand the concepts behind the audit procedures being performed in a given audit area. This session is an audit concepts program or that will take the participants on a journey that links the audit procedures to the audit standards. The session will also offer practical ideas on how to make the audit area procedures more efficient while maintaining the audit quality.

Publication Date: August 2019

Topics Covered

  • A Review of the Auditing Standards
  • A Review of the Financial Statement Assertions
  • Inventory, Cost of Goods Sold & Related Fraud Risks
  • Audit Procedures
  • Substantive Procedures

Learning Objectives

  • Identify inventory, cost of goods sold, and related fraud risks
  • Identify audit procedures for detecting inventory, cost of goods sold, and related fraud schemes
  • Recognize inventory valuation methods considers the most recent purchases of inventory are the first items sold to customers
  • Describe which standards requires an auditor to maintain independence in mental attitude in all matters relating to the audit
  • Identify what would be considered an analytical procedure in an inventory audit
  • Recognize where the assertion of existence falls under
  • Describe which procedures starts with a source document and verifies the transaction is recorded in the financial statements
  • Identify which type of inventory write-off is done to record stolen items
  • Recognize where a watering down the inventory fraud scheme would most likely occur
  • Recognize where a substantive testing of work-in-process inventory would most likely be done
  • Describe the Fraud Triangle
  • Identify where the auditor should set the materiality threshold for fraud, when considering the materiality threshold
  • Recognize controlled inventory items
  • Identify what tracks tracks inventory on a real time basis
  • Describe which of the Auditing Standards requires an auditor to adequately plan the work and properly supervise any assistants
  • Describe data analytics
  • Differentiate auditing objectives for inventory & cost of goods sold?
  • Describe Red Flag for Fraud

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
None

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $59.00

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