Hi, could I have solution for this case thanks,

The inventory count was performed at the main warehouse in Ontario, where 75% of the inventory is held. Inventory during the count was well organized and all items in the warehouse were appropriately tagged. Inventory counters were working in pairs to ensure the accuracy of the count.  

 

Inventory Test Counts

We selected a random sample of 40 different products from the inventory listing and performed a test count on each of those items. All of the test counts agreed to the count sheets except for the following two discrepancies: 

 

 

 

Product

Description

# of items per auditor

# of Items per count

Model # 5267XYB    

Winter Tires

44

45

Model # 645XMHN

All Season Tires

33

36

 

 

Upon discussion with the warehouse manager these discrepancies are a result of one particular counter who had been assigned to count the tire inventory and was continuously making errors. Tires are organized by model and are stored in five-tiered shelving racks that hold 9 tires per row. The warehouse manager has since replaced this particular counter. No further audit work is required.

 

Selected a sample of 40 items from the inventory floor and performed a test count on each of these items. All items tested agreed to the count conducted by the counter.

 

Pricing and Compilation Testing

Price tests were performed on the items selected during the count. Each item was agreed to the supplier invoice and no discrepancies were noted. As tires do not have an expiration date, obsolescence is not an issue; therefore, net realizable value testing was not necessary. Based upon the work perform, we conclude inventory is fairly stated.

 

Inventory - In the table below identify and explain three major deficiencies in the work performed in the testing of inventory. Provide recommendations regarding further actions and/or audit procedures.

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Status NEW Posted 11 Jul 2017 05:07 AM My Price 7.00

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