How to improve the quality of inventory audit

This paper introduces the present situation and difficulties of inventory audit, analyzes the reasons for the failure of inventory audit, and puts forward some suggestions on improving the quality of inventory audit. Keywords inventory audit; Difficulties; Improve quality; It is suggested that for general manufacturing or commodity circulation enterprises, inventory has a special position in accounting statements. It is not only the main item of current assets in the balance sheet, but also the largest component of working capital in the cash flow statement. The accuracy of inventory pricing will also have a great impact on the income statement. In the audit practice, due to the complexity of inventory cost calculation and the particularity of quantity and quality appraisal, auditors mostly stay at the level of original vouchers of spot-checking materials and labor costs, and the quantity and quality are directly reflected by the audited units, which cannot meet the requirements of audit objectives. Therefore, in order to obtain satisfactory inventory audit results, higher requirements are put forward for the technology and skills of inventory audit. I. Status quo and difficulties of inventory audit (I) Status quo of inventory audit Compared with other asset items, inventory audit is more complicated. Its audit status is as follows: due to the complexity of inventory cost calculation and the particularity of quantity and quality appraisal, most of the cost value stays at the original voucher level of sampling inspection materials and labor costs; In terms of quantity and quality, directly accept the quantity and quality reflected in the accounts of the audited entity. (2) Difficulties in inventory audit 1. In inventory valuation, the calculation of inventory cost is complicated. Auditors need to check the data in the accounting data of the audited entity, or calculate separately through non-accounting data, such as the data provided by the production department and the labor department, and analyze and evaluate whether the value is accurate and reliable. In the calculation of inventory cost, the consumption of raw materials, the calculation of labor wages and the distribution of manufacturing expenses should be involved. If several different products are produced at the same time, material expenses, salary expenses and other related expenses should be distributed among different products according to the product output ratio method, fixed consumption ratio method and working hours ratio method. Enterprises that adopt planned price pricing should also share the material cost difference in the inventory cost. 2. In terms of inventory quantity, it is difficult to control and count because the inventory is stored in different places (including factories, sales organizations and branches). 3. In terms of inventory quality, it is difficult to observe and identify due to the variety of items. Its value may be damaged by dullness, obsolescence, scrapping and damage, and it is difficult for auditors to make reasonable judgments because they do not know enough about the production and marketing activities and business of the audited units. Second, the reason for the audit failure is that the auditors are unfamiliar with the process of the audited entity, have no in-depth understanding of the production process of the product, and still stay in the original voucher level of material cost and labor cost to conduct spot checks and tests, which are vague and have been brushed aside, resulting in the audited entity spreading some irrelevant raw materials into the cost without finding out, such as collecting materials to make special equipment, and counting the material cost into the production cost. In addition, the auditors did not analytically review the relationship between accounting information and non-financial information, the calculation and analysis of the ratio, and did not analyze the product cost composition of the audited unit. After simply calculating the book figures, they confirmed that the inventory cost calculation was correct, but they didn't realize that the audited unit might have other more common mistakes. For example, materials are falsely delivered from the warehouse, costs and expenses are falsely listed, and current profits are adjusted. Second, the auditors inform the audited unit of the location of inventory supervision in advance, so that the audited unit can make preparations in advance and make false adjustments to the inventory in the unobserved locations. The inventory supervisor is inexperienced, and the auditor allows the auditee to track and record the items selected by the auditor, so that the auditee has the opportunity to falsify the unselected items afterwards. Third, auditors lack professional knowledge in inventory, and there are no professionals in the audit team. For example, in the valuation of ending inventory, due to the lack of professionals and professional knowledge, even if the ending inventory of the audited entity is impaired, whether the impairment loss should be accrued and the amount of impairment reserve correctly should not make the auditors have great certainty, which leads to the low credibility of the audited entity's report in terms of inventory quality. Three. Suggestions on improving the quality of inventory audit (1) Inventory cost valuation 1. Check whether the principle of consistency is adopted in the allocation of material valuation method and material cost variance rate. You can choose one month or several months' material outbound order for recalculation to verify whether the material pricing of the audited entity is appropriate and fair. 2 in the production cost audit, to review the enterprise's technological process, management requirements and product cost accounting methods are applicable and scientific; Whether the collection and distribution methods of production expenses are reasonable; Whether the cost allocation between finished products and products is appropriate; Also check whether the production notice, output and working hours records are complete; Whether it is consistent with the production cost subsidiary ledger and cost calculation sheet. Auditors can collect information such as the composition of raw materials, quota consumption quota, comparison of material consumption of similar products in the early stage of the enterprise, and consumption quota of similar products in the industry. , and contact each other, confirm and analyze doubts and anomalies. They can also collect the working hours quota or experience consumption data of enterprise products, production statistics or attendance records of workshops, factories and mines that produce products, logs or machine-team records of workshop product consumption and commencement records, relevant information of workshop accounting calculation, personnel distribution and types of work in the labor department, and so on. Labor costs allocated with financial collection are used for mutual verification, analysis and audit to identify whether there is artificial profit adjustment. For the abnormal situation, the enterprise is required to provide convincing evidence to prove its rationality and authenticity. 3. The audit of product cost has its particularity, for example, it is difficult to draw after the period; Whether the final cost is true or not mainly depends on the accuracy of product measurement at the end of the period and the scientific cost accounting method. Because this particularity is often ignored by a few auditors, they often give a "confirmed" conclusion after checking the general ledger with the subsidiary ledger, which is obviously a hasty conclusion. In order to ensure the sufficiency and appropriateness of product audit evidence, auditors should pay attention to the rationality and consistency of their cost allocation standards as much as possible, and assist some analytical reviews, such as analyzing the rationality of the carried-over finished product cost through the change of the unit cost of finished products, so as to observe and judge the rationality of the product cost. Of course, in the above analysis, the influence of price changes of materials and other expenses cannot be ignored.