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hi, is inventory held by 3rd parties= inventory held on behalf of those 3rd parties? sorry i get confused when i hear the term..because in audit of inventory we need to ensure as auditors that inv held by 3rd parties are seperately identified durg stock count.what is the reason for that?.is the reason for that= so that we dnt include inv held by 3rd parties as the co’s inventory which would result in overstatement of inv figure?
Inventory held by 3rd parties = our inventory held somewhere else. This should be included in our year-end inventory
Inventory held for 3rd parties = someone else’s inventory on our premises. This should be excluded from our year-end inventory.
Thanks sir, it is all clear now..i got a question regarding substantive procedures/tests on accounts payables please, “check whether last year’s closing balances have been properly brought forward this yr”..could that confirm completeness of payables or sumthing wrong with my wording please
Those balances are from a year ago and you have to consider how that would help with completeness of current payables – unless you are dealing with non-current liabilities.
thx sir it is clear and it is clear that i shouldn’t be usg that as a substantive procedure for compleness of payables. Can creditors circularisation be considered as a substantive procedure ?
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