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Step Description<br />
e. How are the Sales cut-offs coordinated with Shipping?<br />
2. Employee Receivables<br />
a. Test the clerical accuracy of the account trial balance or agree to<br />
G/L<br />
b. Determine all individuals are still in the employ of the company.<br />
3. Inter-Company Accounts – Determine amounts have been<br />
confirmed with other locations<br />
4. Other Receivables<br />
a. Obtain trial balances of significant accounts, test the clerical<br />
accuracy and agree to G/L.<br />
b. Determine propriety of larger items.<br />
F. Inventories<br />
1. Are separate G/L accounts maintained for RM, WIP and FG?<br />
2. Are perpetual inventories maintained?<br />
a. Are the perpetual inventories reconciled to or integrated with the<br />
G/L accounts?<br />
b. Is a cycle count program in effect?<br />
(1) If so, describe the program.<br />
(2) Review recent test counts and ascertain that adjustments were<br />
posted to the G/L.<br />
3. Physical Inventories<br />
a. Obtain the most recent physical inventory and trace the<br />
adjustment into the G/L.<br />
b. Is the amount of the adjustments reasonable?<br />
c. Were the reasons for the various adjustments identified?<br />
d. What steps have been taken to correct future occurrences?<br />
e. If a shrink reserve is recorded, is it adequate?<br />
4. Costing<br />
a. When were standard cost last revised?<br />
b. When were bills of materials last revised?<br />
c. Review variance accounts for reasonableness.<br />
5. What procedures are used to ensure a proper shipping cut-off?<br />
6. What procedures are used to ensure a proper receiving cut-off?<br />
7. Describe the Cost system, including how Cost of Goods Sold is<br />
determined. Is it a calculated or forced number?<br />
G. Tooling<br />
1. Obtain the lapse schedules for significant accounts and agree to<br />
the G/L.<br />
2. Vouch some recent additions to ascertain propriety.<br />
3. Ascertain that amounts are been amortized over the proper life.<br />
H. Fixed Assets<br />
1. Are items recorded in the proper G/L accounts? i.e. Land,<br />
Buildings, Machinery & Equipment, etc.?<br />
2. Has a physical inventory ever been taken or an appraisal<br />
obtained?<br />
3 If so, have detail records been maintained?<br />
4. If so, agree detail records to the G/L.<br />
5. Obtain a trial balance of CIP and agree to the G/L.<br />
Inspect several of the larger projects to determine stage of<br />
Yes/<br />
No<br />
Done By<br />
Reference<br />
101
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