Today, I move on to the new CAATs test for Pyrm, it is called an inventory costing accuracy test, Inventory costing accuracy test is a process used by companies to verify the accuracy of their inventory costing methods. The purpose of this test is to ensure that the company's financial statements accurately reflect the value of its inventory and the cost of goods sold. This test involves comparing the actual cost of goods sold and the value of the inventory on hand with the cost and value recorded in the company's accounting system. If there are any discrepancies between the actual and recorded costs, adjustments must be made to the accounting records to bring them into alignment with the actual costs. Inventory costing accuracy tests can be conducted using various methods, including physical inventory counts, inventory observations, and data analysis. These tests help ensure that inventory is valued correctly and that the company's financial statements are accurate and reliable. To perform this test, normally will have a walkthrough session together with the client to check the calculation performed by their system is accurate, however, I have been informed that as the report needs to be submitted, hence I will have no enough time for me to perform this walkthrough, so to do that, I can use the previous year report and indicate that the costing is same with last year, hence the report can be used for this current financial year.
Main things that have learned
-Learn the concept of inventory costing accuracy test
-Know that last year's report can be relied on and can be used as the report for the
current year
Comment/idea/opinion
The inventory costing accuracy test is to test whether the method used by companies is accurate and standardized or not, my senior told me that the test related to inventory is much more difficult and complicated compared with the other tests that I have gone through.
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