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The company plans to conduct full inventory counts at the warehouses on 2, 3 and 4 April, and any necessary adjustments will be made to reflect post year?end movements of inventory. The internal audit team will attend the counts.
professor as a part of audit response if we state that “obtain copy of GDNs and GRNs issued close to reporting date and perform detailed cut off testing to a assess if they are recorded in correct accounting period” then is it wrong?
I ask this because the examiner states that we need to obtain “post year end” GDNs and GRNs
its not related to marking in any way. All i want to is conceptually if my point will be considered valid or i would have to compulsorily state “post-yr end” point
You have to do “both sides” of the y/e:
Goods in before the y/e: in inventory – so must be in purchases/liabilities also
Goods in after the y/e: not in inventory – purchase/liability recorded after the y/e
Goods out before the y/e: not in inventory – so must be in sales/receivables also
Goods out after the y/e: in inventory – sales/receivable recorded after the y/e
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