An investigation of the effects of audit planning on inventory audit. a survey of selected audit firms in Nairobi county.
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Date
2014-07-16
Authors
Okello, Maureen Akinyi
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Abstract
The current competitive business environment has forced organizations to scrutinize their
inventory because of the important role it plays in the overall business operations .Thus
the main purpose of the study was to investigate the effects of audit planning on inventory
audit with particular reference to selected audit firms in Nairobi County. The general
objective of the study was to investigate the effects of audit planning on inventory Audit
while the specific objective of the study was to determine the effects of audit strategy,
allocation of resource, focus on priority risk areas and the determination of the scope of
audit on inventory audit. The research study used descriptive research design in collecting
the data from respondents. The target population was drawn from two hundred and six
audit firms located in Nairobi County consisting of Audit Partners, Audit Managers and
other Audit Staff .The research study used stratified random sampling procedure to select
a representative sample. The primary data for the study was collected using the
questionnaires. Quantitative data was analysed using regression and correlation statistics
with the aid of Statistical Package for Social Sciences (SPSS 17), while qualitative data
was analyzed using content analysis. According to the study 87.3%, 76.1%, 81.7%,
77.5% of the respondents stated that, audit strategy, allocation of resources, scope of audit
and priority risk areas respectively influence inventory audit. The study established that
audit planning facilitates the auditor to develop audit strategy so as to determine in general
terms how the inventory audit is to be carried; process of audit scope helps the auditor
determine the resources necessary to perform the inventory audit and establishes the depth
of the inventory audit; giving priority to risk areas and facilitates the auditors to factor
various risks associated with inventory audit into the planning process. The study
recommended that the auditor obtains the understanding of the accounting and internal
control systems in the organization; consider the complexity of the entity's systems and
controls and the manner in which they are used.
Description
Department of Accounting and Finance, 74p. 2013, HJ 9925 .K4O4