WIP Transactions & GL vs. Inventory Valuation Report

[Vincent4436]

I know this going to seem like a real junior question, but I am looking for some help.

I am a financail auditor and was wondering what the financial impact of making WIP adjustments is? Is it any different that the normal inventory adjustments? Would this cause the inventory reports not to balance with the GL?

Secondly, what in general, might be some common causes of the perpetual inventory not matching the GL?

 

[Marlene DeNardi]

It's a question many people are investigating

A WIP adjustment tranaction Debits WIP and Credits Inventory Discrepency

Why doesn't it tied out? Basically any transaction that could impact WIP could in effect be a problem. Depending on how the system is being used. Are many custom programs run? Is there material at a subcontract site that is not being valued? Are receipts incorrect? Are labor and or backflush transcations correct?

There are a million possible causes for inventory problems.