QUESTION

Items one through eight are selected questions characteristically found in questionnaires used by auditors to acquire an understanding of internal control in the inventory and warehousing cycle. In using the questionnaire for a client, a yes reply to a question indicates a possible internal control, while a no indicates a potential deficiency.

1 Is a full perpetual inventory master file maintained for raw materials inventory?

2 Are physical inventory counts made by somebody other than storekeepers and those responsible for maintaining the perpetual inventory master file?

3 Is the clerical correctness of the final inventory compilation checked by a person independent of those responsible for preparing it?

4 Does the getting department prepare pre-numbered receiving reports as well as account for the numbers occasionally for all inventory received, showing the description as well as quantity of materials?

5 Is all inventory stored in the control of an inventory custodian in areas where access is limited?

6 Are every shipments to customers authorized by pre-numbered shipping documents?

7 Are standard cost records rummage-sale for raw materials, direct labour and manufacturing overhead?

8 Is there a stated policy with definite principles for writing off obsolete or slow-moving goods?