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Kaplan University Inventory Audit & Perpetual Inventory System Questions

Kaplan University Inventory Audit & Perpetual Inventory System Questions

Question Description

You will analyze a company’s currentinventory setup and determine the course of action to take to audit theclient’s inventory. In order to successfully audit inventory, a thoroughplan must be devised to ensure all facets are accounted for.

The Crafty Craft Corner has been askedby its bank to perform an audit, which it has never done before. Partof this audit is to perform a year-end physical inventory. The storeuses a periodic inventory system, as management does not feel it’snecessary to track every bead and button sold.

  • As the auditor hired to perform theinventory audit, what are your recommendations to the store managementto prepare for the audit?
  • Would you suggest they implement aperpetual inventory system? What documentation would you request themanagers create regarding their inventory?
  • What other steps would you recommend to ensure a smooth process?

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