Auditing for Cash and Inventories


Overview/Description
Target Audience
Expected Duration
Lesson Objectives
Course Number


Overview/Description
Managers, investors, and various other stakeholders use a company's detailed financial information to plan various budgets, investment profiles, and risk measures, among other things. When auditing a company, the auditor's job is to ensure that all the financial information is reasonably accurate as well as provide feedback on areas that seem to have weak internal controls. Auditors are particularly concerned with the cash and inventory accounts, as these can easily be manipulated through fraudulent activities and prone to material misstatements. Cash is especially at high risk because it can be easily transferred. This course describes what auditors have to consider when auditing cash and inventories. It presents the methodology for auditing cash, which consists of listing the audit objectives for cash transactions and performing a series of tests on internal controls and on recording transactions to ensure these objectives are met. The course also describes how the risks related to inventories are identified. And it outlines the different types of tests that can be performed to determine whether the reporting of physical flow of inventories and their related costs is correct.

Target Audience
Managers, departmental leaders, prospective auditors, and all individuals interested in or involved in the auditing function in their organization, and those looking for an introduction to the audit function

Expected Duration (hours)
1.0

Lesson Objectives

Auditing for Cash and Inventories

  • identify the responsibilities of the auditor in auditing cash
  • describe auditors' considerations when auditing inventories
  • recognize appropriate objectives for auditing cash transactions
  • identify appropriate tests to perform to audit the recording of cash inflows and outflows
  • describe analytical procedures that can be used to identify any misstatements that may affect costs of goods reported
  • identify the types of tests to perform when auditing the physical flows of inventories
  • Course Number:
    fin_06_a04_bs_enus