Internal controls over the 'ship finished goods' function in the inventory and warehousing cycle are normally tested by the auditor as a part of performing tests of controls and substantive tests of transactions in the sales and collection cycle.

Question

Quizplus · Accepted Answer

This statement is true. The 'ship finished goods' function in the inventory and warehousing cycle is directly related to the sales and collection cycle, and therefore, the auditor would test internal controls over this function as a part of testing controls and substantive tests of transactions in the sales and collection cycle.

Internal Controls Over the 'Ship Finished Goods' Function in the Inventory