You are scheduled to be present for the inventory observation of one of your manufacturing audit clients.
You are scheduled to be present for the inventory observation of one of your manufacturing audit clients. During the observation, you noticed the following:
Some of the employees who were counting the inventory stopped to load a truck for shipment.
During test counts, you noticed that the expiration date of a large bin of items was two years old. When you questioned the client, the inventory manager told you that he/she felt the company could still sell the items.
At the end of the day, a large shipment was received. It was not included in the count.
Prepare a report discussing the following:
The procedures you should perform before going on-site for the inventory observation.
Based on this preliminary review of the client’s inventory, you determine that there is a significant risk of material misstatement and/or fraud. Discuss what changes you will make to the normal observation process based on this information.
The procedures you will take to address each of the issues noted during the observation.
Your report should meet the following criteria:
Be 3.5 pages in length, not including the title and references pages.
Demonstrate your comprehension of the course material.
Use professional business language.
Be formatted according to APA
Include 2-3 sources
Answer preview to you are scheduled to be present for the inventory observation of one of your manufacturing audit clients.
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