Apollo Audit Auditing Apollo Shoes

Inventory and Warehousing: Test of Controls

Testing the controls that exist in the inventorying and warehousing processes at Apollo Shoes consists of the auditor ensuring that the existing controls actually measure what they set out to measure, and that these measurements reflect that actual movement of goods and materials through the various parts of the business (Arens et al. 2008). Certain processes, such as the means by which inventory is checked in and out of various stations in the business, must also be examined (Arens et al. 2008). Ensuring that these practices are able to influence physical movements of materials and goods is key to the audit process.

Inventory and Warehousing: Test of Transaction

In order to test the transaction that exist in Apollo Shoe's inventory and warehousing processes, the specific physical and record-keeping details of the company must be determined by the auditor. A typical flow of inventory through purchasing, warehousing, and distribution includes raw materials purchasing, manufacturing through labor and other processes, storage, and shipment, and all of these steps apply to Apollo Shoes (Arens et al. 2008). An audit that tests the existing controls on these procedures...

2008). The cost of goods sold and the volume of material purchased should be in roughly the same proportion as in previous years, taking into account changes to cost of supplies such as leather and rubber used in the manufacturing of the shoes. Other statistics that measure not simply the performance of the company but the physical amounts of resource consumption, time between deliveries, and a variety of other…