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FOREWORD BULLETIN NO. 1 issued by the committee on auditing procedure, "Extensions of Auditing Procedure," contains the following statements: " (A) That hereafter, where the independent certified public accountant intends to report over his signature on the financial statements of a concern in which inventories are a material fac-tor, it should be generally accepted auditing procedure that, in addition to making auditing tests and checks of the inventory accounts and records, he shall, wherever practicable and reason-able, be present, either in person or by his representatives, at the inventory-taking and by suitable observation and inquiry satisfy himself as to the effectiveness of the methods of inventory-taking and as to the measure of reliance which may be placed upon the client's representations as to inventories and upon the records thereof. In this connection the independent certified public accountant may require physical tests of inventories to be made under his observation. "In cases where the inventory is determined solely by means of a physical inventory at the end of the accounting period (or at a date prior or subsequent thereto but within a reasonable time thereof, with adequate records supporting the interim changes), it will ordinarily be necessary for the foregoing pro-cedures to be followed at that time. "In cases where the concern maintains well kept and con-trolled perpetual inventory records supported by (1) a complete physical inventory at a date not coincident with the balance-sheet date, or (2) physical inventories of individual items taken from time to time so that the quantity of each item on hand is compared with the inventory record for that item at least once in each year, it will be satisfactory to undertake the procedure outlined at any interim date or dates selected by the auditor, his purpose being to satisfy himself as to the credibility of the per-petual-inventory records and whether they may be relied upon 107 Statements oh Auditing Procedure Issued by the Committee on Auditing Procedure, American Institute of Accountants, 13 East 41st Street, New York 17, N. Y. Copyright 1943 by American Institute of Accountants Case Studies on Inventories No. 16 December 1942
Case studies on inventories
|Author||American Institute of Accountants. Committee on Auditing Procedure|
Broad, Samuel J.
Aitken, J. N.
Brundage, Percival F.
Duncombe, Fred J.
Ellis, George P.
Frisbee, Ira N.
Glover, P. W. R.
Kracke, Edward Augustus
Lenhart, Norman J.
Lindquist, John A.
Main, Frank Wilbur
Stempf, Victor H.
Carey, John L, 1904-
Inventories -- United States -- Auditing -- Case studies
Statements on auditing procedure, No. 16
|Source||Originally published by: American Institute of Accountants|
|Rights||Copyright held by and permission to reprint: American Institute of Certified Public Accountants|
|Format||PDF page image with corrected OCR scanned at 400 dpi|
|Collection||Deloitte Digital Collection|
|Digital Publisher||University of Mississippi Library. Accounting Collection|