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You have been assigned to the audit of the inventory at XY Limited, a distributor of hardware to retailers throughout Australia. While planning for the audit, you have obtained the following information:
1. XY has 50 warehouse located throughout Australia. Warehouse are used in a short-term basis depending on regional demand. The maketing manager has indicated that the hardware market is highly competitive and the ability to deliver product quickly is essential.
2. A follow up on inventory counts has indicated that at least 3 warehouses were not included in the final stocktake procedure as the financial controller was not informed of their existence until after the balance date. The inventory omitted comprised approximately 4% total inventory.
3. Signigicant problems were experienced during stocktakes in NSW and Queensland as the client's staff were relatively new and were confused by the stocktake instructions sent out by head office.
4. Stock is commonly moved between warehouse in order to cater for stronger demand in areas owing to seasonal fluctuations.
1. XY has 50 warehouse located throughout Australia. Warehouse are used in a short-term basis depending on regional demand. The maketing manager has indicated that the hardware market is highly competitive and the ability to deliver product quickly is essential.
2. A follow up on inventory counts has indicated that at least 3 warehouses were not included in the final stocktake procedure as the financial controller was not informed of their existence until after the balance date. The inventory omitted comprised approximately 4% total inventory.
3. Signigicant problems were experienced during stocktakes in NSW and Queensland as the client's staff were relatively new and were confused by the stocktake instructions sent out by head office.
4. Stock is commonly moved between warehouse in order to cater for stronger demand in areas owing to seasonal fluctuations.
