Three internal controls and test of controls of inventory of Kathmandu holdings.

Expert Solution

Three internal controls of inventory are:

1. Proper protection of inventory: There should be proper lock for the inventory so that it could be protected from theft or any other accident.

2. Seggregation of inventory customer wise: Inventories should be properly divided and seggregated so that no confusion persist later on.

3. Signature for all inventory inserted or removed from the warehouse.

Three Test of controls of inventory are:

1. Inspection : It means that physical examination of inventory should be done and also the documentation of the same is also required to be checked.

2. Observation : Observation consists of looking at a process or procedure being performed. for example: the auditor's observation of inventory counting by the entity's personnel, or the process of control activities.

3. External Confirmation : Confirmataion from the third party can also be taken regarding the quantitites and condition of inventory held on behalf of the entity

ekkarill92 answered 1 year ago

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Three internal controls and test of controls of inventory of Kathmandu holdings.

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