(16)Discuss risks and relevant control objectives for Inventory Cycle?
Answer:
The Inventory Cycle is a process
of tracking the inventory
levels for an enterprise. An inventory system should maintain accurate record of all stock movements
to calculate the correct
balance of inventory. The typical phases of the Inventory Cycle for Manufacturers
are as follows:
(1)The ordering phase: The amount
of time it takes to order and receive
raw materials.
(2)The production phase: The amount of time it takes to convert
the raw material finished goods.
(3)The finished
goods and delivery
phase: The finished goods that remain in stock and the delivery time to the customer.
Following are the risks and control
objectives for Inventory Cycle:
