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audit of work in process vs purchased goods

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Explain why the audit of work-in-process and finished goods inventory is generally more complex than the audit of purchased inventory?

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The expert provides a discussion (216 words) is in everyday language suitable for novice to intermediate. The expert explains why the audit of work-in-process and finished goods inventory is generally more complex than the audit of purchased inventory.

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The cost of purchased inventory can be verified by examining the invoice. Verifying existence is easy -- you can see it and count it. You know the selling price because it is finished and available for sale so you can compute lower of cost or market.

Work in process and finished goods for manufacturer is a bit ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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