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Planning for Stock taking
Stock taking should be planned well in carried out and advance carefully and systematically through persons fully informed of the duties involved. Those taking part should include persons familiar with the various sections of stock and where practicable supervisors and checkers should be drawn from departments which have no control over the rare custody or movement of stocks. Where particular knowledge is essential to signify the nature or quality of items of stock the client would ensure about personnel properly qualified for this purpose are obtainable at the stock take. Arrangements should be made to ensure a proper cut-off. This means is dispatch documentation should have been originated for all goods dispatched before stock taking and whether still on hand, for all goods whether the property has passed to the customer. The latter should not be involved as stock whenever the count is made.The process should ensure about the suitable sales invoices are recorded in the correct financial period. Also liabilities have to be set up for all goods included and received in stock and for all goods purchased the property which has been passed to the client. This should be included in the stock even when they are not yet on the company's premises. Arrangements should be made to ensure about goods held in safe custody for another are not recorded as part of the client's stock. Arrangements should be made to confirm and record in the stock sheets details of goods held for the company through outside parties and arrangement should be made to recognize slow moving, or damaged or obsolete stock.
The stock taking instructions should call for the following information also which should be accessible to the auditors while and at the conclusion of the stock take.
Audit Procedures - Intangible Assets The auditor's process as far as goodwill is relating would involve as: a) Vouching for details as per the buy agreement of the values
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audit account?
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General advantages and disadvantages of joint audits Advantages: All work and fees are welcome to audit firms. An opportunity to closely inspect the auditing methods
Current Audit File The current audit file might include inter alia: a) A copy of the audited financial statements and any report prepared as a result of audit work carried out
Question: Part A (i) Describe audit sampling. Why do auditors sample instead of examining every transaction? (ii) List the four factors that enter into the sample size
why are the figures presented to an auditor not sufficient for absolute reliance
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