Case Study On Inventory Audit Of Zhenlong Company

Inventory is an important part of financial statements,the authenticity and accuracy of inventory information is of vital importance to financial report users.Inventories often occupy a large quantity of working capital,and for most enterprises,inventories may appear in each link of operation of enterprises,what's more,some certain types of inventories are really special,making inventory misstatements more and more common.Among many inventory misstatements cases,agricultural and sideline processing enterprises account for a large proportion.Agricultural and sideline processing enterprises have the characteristics of both manufacturing enterprises and agricultural enterprises,so the possibility of inventory misstatements increases a lot.As an effective method to discover and reveal inventory misstatements,inventory audit fails to play its due role yet.Inventory misstatements in agricultural and sideline processing enterprises have been gradually intensified,however,the state of inventory audit is barely satisfactory.There are a lot of problems in process of inventory audit of agricultural and sideline processing enterprises,which lead to the failure of audit.Under these circumstances,how to implement audit procedures to discover and reveal inventory misstatements in agricultural and sideline processing enterprises,avoid audit risk,thus improve the quality and effectiveness of inventory audit has become a common concern of the public.Based on the above reasons,this paper makes an in-depth discussion on the countermeasures to perfect inventory audit of agricultural and sideline processing enterprises.This paper firstly introduces the domestic and foreign research status about inventory audit and discusses the meaning,characteristics,process and general targets of inventory audit.On the basis of analyzing characteristics of agricultural and sideline processing enterprises,this paper puts Zhenlong company as an example,making an analysis of inventory audit status of Zhenlong company from four aspects of risk assessment process,internal control test of inventory,goods in stock scrutinizing stocktaking and inventory valuation audit.And then this paper focuses on problems in inventory audit process and causes of the failure of inventoryaudit.Ultimately,based on the above theories and case study,this paper gives some suggestions on improving quality and effectiveness of auditors' inventory audit of Zhenlong company,such as inquiring about and making on-the-spot inspection of Zhenlong's production status,improving the effectiveness of inventory internal control test,perfecting the goods in stock scrutinizing stocktaking and focusing on the authenticity of the purchase price of raw materials.