Audit procedures: quantity - part 2
In this lesson, you'll learn how to design and implement audit procedures that address specific inventory count risks—essential knowledge for the AA module and real-world audit practice.
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In this lesson
- 0:00 Inventory count controls and fraud prevention
- 1:18 Mitigating miscounting through two-person teams
- 2:39 Preventing damaged goods manipulation
- 5:03 Stopping unrecorded inventory theft
- 6:37 Continuous inventory systems and audit procedures
- 8:59 Managing missed perpetual counts
- 10:46 Cut-off testing for purchases and sales
About this lesson
Using a practical scenario involving warehouse theft and miscounting, you'll discover the control procedures auditors recommend to prevent fraud and error during physical inventory counts, including two-person counting teams, independent oversight, and proper segregation of duties for write-offs. You'll also explore how auditors respond when perpetual inventory systems fail, why cut-off testing matters, and how to adjust your audit approach when controls break down. By the end, you'll understand both the preventive controls that strengthen inventory counts and the detective procedures auditors use to verify completeness and existence of stock.
Duration: 14m
Transcript
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