What type of documentation should the audit team collect for the inventory cycle?
The audit team should collect documentation related to purchasing inventory and selling inventory.
When purchasing inventory, the audit team should focus on the voucher package, which is the purchase order, receiving report, and invoice related to a purchase (receieved from supplier/vendor). When a company purchases inventory, that will increase their inventory balance.
When a company sells inventory that will reduce their inventory balance, and that represents revenue and cost of goods sold. The items related to selling inventory are invoices (sent to customer), shipping documentation (tracking #), and sales order (details out what the customer purchased).
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