Physical stock rely - Checklist
Source: Handout of Examine Orientation by HKICPA
Assets verification– Three important elemetns
Ownership: Place / Location of the stock (Other than placed by third party) Existence: Physical count – In good condition and quantity Valuation: Obtain invoice – unit expense and following sale to verify the NRV
Share take issue
1 . Ahead of stocktaking –
Review recently working paper (if any) and consult with management a. any top quality item
n. location of stock
c. cut-off issue
d. any kind of stock placed by 3rd party
e. any kind of significant alter of the above with recently
2 . During stocktaking –
Observe the client's internal control system
a. actual work of the customer are follow with arranged procedure b. observe inventory take transported by consumer whether they follow the instruction c. follow up stop, instruction getting followed and compared stock count with list g. check the quality value items and identify virtually any obsolete inventory during the count e. completeness of the stock count list with pre-number count sheet is transported by consumer
3. After stocktaking – Follow up
a. Check the cut-off with information on the last numbers of stock activity forms and goods inwards / outwards after the season end. b. Check final stock bedding for costs, extension, spreading, summarizing and signature. c. Third party qualification etc and obsolete stock provision.
Physical stock count number - Tips (Cont'd)
A. Cut off Process
Why shut down is important in stock consider, purchase and sale screening?
How to execute the cut-off of inventory, purchase and sales so the sales and purchase transactions happen to be complete and deal with in the appropriate accounting period?
B. Sale and Purchase
Sales / Buy invoice would be select intended for testing by simply cross examine to journal to ascertain the completeness of sale. On the other hand, by selecting sales / purchase entry in ledger and cross verify to account could confirm the...
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