Question

Auditing the revenue process and Auditing the inventory management process. What is the importance?

Answer 1

Auditing Inventory

It is the process of cross-checking of financial records with physical inventory and records.

Importance

It is a generally accepted auditing procedure where an independent auditor issues an opinion on whether the financial records of inventory accurately represent the actual inventory being carried. It must verify not only the amount of inventory but also its quality and condition to see whether the value of the inventory is fairly represented in financial records and statements.

Importance of auditing the revenue process

It is one of the most important thing that auditors need to make sure that they are well and correctly prepare to minimize audit works and risks. Revenues are one of the important areas that auditors need to place their great attention. Revenues are also the important areas where the risks of manipulation, risks or errors are likely to happen on most of the entity.