- 10 Marks
AA – L2 – Q69 – Audit Reports
Draft a management report addressing inventory and credit limit deficiencies at TechTrend Solutions, including implications and recommendations.
Question
TechTrend Solutions sells personal computers (PCs) to independent shops. You are the external auditor of TechTrend Solutions. Your interim audit revealed the following issues:
(1) The half-year physical inventory count revealed that some PCs supposed to be in inventory were missing and that other machines which had been returned by customers were in inventory but had not been recorded as having been returned. A few of the missing PCs have been traced to directors who borrowed them for use at home.
(2) Two customers had been allowed to exceed their credit limits and new customers in the last year had not been allocated credit limits.
Required:
Draft the section of your report to management dealing with the above deficiencies. Set out the deficiencies, their implications, and your recommendations for improvement.
Find Related Questions by Tags, levels, etc.
