chapter 13 Inventory
审计学：一种整合方法 阿伦斯 英文版 第12版 课后答案 Chapter 13 Solutions Manual
Chapter 13Overall Audit Plan and Audit ProgramReview Questions13-1The five types of tests auditors use to determine whether financial statements are fairly stated include the following:Risk assessment proceduresTests of controlsSubstantive tests of transactionsAnalytical proceduresTests of details of balancesWhile risk assessment procedures (procedures to gain an understanding of the entity and its environment, including internal control) help the financial statement auditor obtain information to make an initial assessment of control risk, tests of controls must be performed as support of an assessment of control risk that is below maximum. The purpose of tests of controls is to obtain evidence regarding the effectiveness of controls, which may allow the auditor to assess control risk below maximum. If controls are found to be effective and functioning, the substantive evidence may be reduced. Substantive evidence is obtained to reduce detection risk. Substantive evidence includes evidence from substantive tests of transactions, analytical procedures, and tests of details of balances.For audits of internal control over financial reporting, the auditor only performs the first two types of audit tests: procedures to obtain an understanding of internal control and tests of controls. Because a public company auditor must issue a report on internal control over financial reporting, the extent of the auditor’s tests of controls must be sufficient to issue an opinion about t he operating effectiveness of those controls. That generally requires a significant amount of testing of controls over financial reporting.13-2Risk assessment procedures are performed to assess the risk of material misstatement in the financial statements. Risk assessment procedures include procedures performed to obtain an understanding of the entity and its environment, including internal controls. Auditors use the results of the risk assessment procedures to design and perform further audit procedures. Further audit procedures (not risk assessment procedures) provide the auditor sufficient appropriate evidence, required by the third GAAS fieldwork standard.13-3Tests of controls are audit procedures to test the operating effectiveness of control policies and procedures in support of a reduced assessed control risk. Tests of controls provide the primary basis for a public company auditor’s report on internal controls over financial reporting. Specific accounts affected by performing tests of controls for the acquisition and payment cycle include the following: cash, accounts payable, purchases, purchase returns and allowances, purchase discounts, manufacturing expenses, selling expenses, prepaid insurance, leasehold improvements, and various administrative expenses.13-4Tests of controls are audit procedures to test the operating effectiveness of control policies and procedures in support of a reduced assessed control risk. Examples include:1. The examination of vendor invoices for indication that they havebeen clerically tested, compared to a receiving report and purchaseorder, and approved for payment.2. Examination of employee time cards for approval of overtime hoursworked.3. Examination of journal entries for proper approval.4. Examination of approvals for the write-off of bad debts.Substantive tests of transactions are audit procedures testing for monetary misstatements to determine whether the six transaction-related audit objectives have been satisfied for each class of transactions. Examples are:1. Recalculation of amounts (quantity times unit selling price) onselected sales invoices and tracing of amounts to the sales journal.2. Examination of vendor invoices in support of amounts recorded inthe acquisitions journal for purchases of inventories.3. Recalculation of gross pay for selected entries in the payroll journal.4. Tracing of selected customer cash receipts to the accountsreceivable master file, agreeing customer names and amounts.13-5 A test of control audit procedure to test that approved wage rates are used to calculate employees' earnings would be to examine rate authorization forms to determine the existence of authorized signatures.A substantive test of transactions audit procedure would be to compare a sample of rates actually paid, as indicated in the earnings record, to authorized pay rates on rate authorization forms.13-6The auditor resolves the problem by making assumptions about the results of the tests of controls and performing both the tests of controls and substantive tests of transactions on the basis of these assumptions. Ordinarily the auditor assumes an effective system of internal control with few or no exceptions planned. If the results of the tests of controls are as good as or better than the assumptions that were originally made, the auditor can be satisfied with the substantive tests of transactions, unless the substantive tests of transactions themselves indicate the existence of misstatements. If the tests of controls results were not as good as the auditor assumed in designing the original tests, expanded substantive tests must be performed.13-7The primary purpose of testing sales and cash receipts transactions is to evaluate the internal controls so that the scope of the substantive tests of the account balances may be set. If the auditor performs the tests of details of balances prior to testing internal controls, no benefit will be derived from the tests of controls. The auditor should attempt to understand the entity and its environment, including internal controls, as early as practical through the analysis of the accounting system, tests of controls, and substantive tests of transactions. 13-8When the results of analytical procedures are different from the auditor's expectations and thereby indicate that there may be a misstatement in the balance in accounts receivable or sales, the auditor should extend the tests to determine why the ratios are different from expectations. Confirmation of accounts receivable and cutoff tests for sales are two procedures that can be used to do this. On the other hand, if the ratios are approximately what the auditor expects, the other tests can be reduced. This means that the auditor can satisfy the evidence requirements in different ways and that analytical procedures and confirmation are complementary when the results of the tests are both good.13-9Substantive tests of transactions are performed to verify the accuracy of a client's accounting system. This is accomplished by determining whether individual transactions are correctly recorded and summarized in the journals, master files, and general ledger. Substantive tests of transactions are also concerned with classes of transactions, such as payroll, acquisitions, or cash receipts. Tracing amounts from a file of vouchers to the acquisitions journal is an example of a substantive test of transactions for the acquisition and payment cycle. Tests of details of balances verify the ending balance in an individual account (such as inventory, accounts receivable, or depreciation expense) on the financial statements. An example of a test of details of balances for the acquisition and payment cycle is to physically examine a sample of the client's fixed assets.13-10 1. Control #1 -- Comput er verification of the customer’s credit limit.The presence of strong general controls over software programs and master file changes can significantly reduce the auditor’s testing of automated controls such as control #1. Once it is determined that control #1 is functioning properly, the auditor can focus subsequent tests on assessing whether any changes have occurred that would limit the effectiveness of the control. Such tests might include determining whether any changes have occurred to the program and whether these changes were properly authorized and tested prior to implementation. These are all tests of general controls over software programs and master file changes.2. Control #2 –The accounts receivable clerk matches bills of lading,sales invoices, and customer orders before recording in the sales journal.This control is not an automated control, but is rather a manual control performed by an employee. General controls over software programs and master file changes would have little effect on the auditor’s testing of control #2. If the auditor identifies control #2 as a key control in the sales and collection cycle, he or she would most likely examine a sample of the underlying documents for the accounts receivable clerk’s initials and reperform the comparisons.13-11 The audit of fixed asset additions normally involves the examination of invoices in support of the additions and possibly the physical examination of the additions. These procedures are normally performed on a test basis with a concentration on the more significant additions. If the individual responsible for recording new acquisitions is known to have inadequate training and limited experience in accounting, the sample size for the audit procedures should be expanded to include a larger sample of the additions for the year. In addition, inquiry as to what additions were made during the year may be made by the auditor of plant managers, the controller, or other operating personnel. The auditor should then search the financial records to determine that these additions were recorded as fixed assets.Care should also be taken when the repairs and maintenance expense account is analyzed since lack of training may cause some depreciable assets to be expensed at the time of acquisition.13-12 The following shows which types of evidence are applicable for the five types of tests.13-13Going from most to least costly, the types of tests are:Tests of details of balancesSubstantive tests of transactionsTests of controlsRisk assessment proceduresAnalytical procedures13-14 C represents the auditor's assessment of the effectiveness of internal control. C3 represents the idea that internal controls are ineffective and no assurance can be obtained from controls and all assurance must come from substantive testing. This would not represent the audit of a public company’s financial statements.Tests of controls at the C1 level would provide minimum control risk.This would require more testing of the controls than would be required at either C2 or C3. Testing controls at the C1 level allows the auditor to obtain assurance from the controls, thereby allowing for a reduction in the13-14 (continued)amount of substantive testing which must be performed to meet the level of acceptable audit assurance. C1reflects the level of testing of controls necessary for the audit of internal controls over financial reporting required by PCAOB Standard 2.It would be a good decision to obtain assurance from tests of controls at point C1especially if the cost of substantive testing is considerably greater than tests of controls.At point C2, the auditor performs some tests of controls and is able to reduce control risk below maximum. Point C2 would be appropriate if it is cost beneficial for the auditor to obtain assurance at a level between the two extremes mentioned above (C1 and C3).13-15By identifying the best mix of tests the auditor can accumulate sufficient appropriate evidence at minimum cost. The auditor can thereby meet the standards of the profession and still be cost effective and competitive.13-16The four-step approach to designing tests of controls and substantive tests of transactions is as follows:1. Apply the transaction-related audit objectives to the class oftransactions being tested.2. Identify specific control policies and procedures that should reducecontrol risk for each transaction-related audit objective.3. Develop appropriate tests of controls for each key control.4. Design appropriate substantive tests of transactions consideringdeficiencies in internal control and expected results from 3 above. 13-17 The approach to designing tests of controls and substantive tests of transactions (Figure 13-4) emphasizes satisfying the transaction-related audit objectives developed in Chapters 6 and 10. Recall that these objectives focus on the proper functioning of the accounting system.The methodology of designing tests of details of balances (Figure 13-6) emphasizes satisfying the balance-related audit objectives developed in Chapter 6. The primary focus of these objectives is on the fair presentation of account balances in the financial statements.13-18 It is desirable to design tests of details of balances before performing tests of controls and substantive tests of transactions to enable the auditor to determine if the overall planned evidence is the most efficient and effective in the circumstances. In order to do this, the auditor must make assumptions about the results of the tests of controls and substantive tests of transactions. Ordinarily the auditor will assume no significant misstatements or control problems in tests of controls and substantive tests of transactions unless there is reason to believe otherwise. If the auditor determines that the tests of controls and substantive tests of transactions results are different from those expected, the amount of testing of details of balances must be altered.13-19 If tolerable misstatement is low, and inherent risk and control risk are high, planned tests of details of balances which the auditor must perform will be high. An increase in tolerable misstatement or a reduction of either inherent risk or control risk will lead to a reduction in the planned tests of details of balances.13-20 The nine balance-related audit objectives and related procedures are as follows:13-21 Auditors frequently consider it desirable to perform audit tests throughout the year rather than waiting until year-end because of the CPA firm's difficulty of scheduling personnel. Due to the uneven distribution of the year-end dates of their clients, there is a shortage of personnel during certain periods of the year and excess available time at other periods. The procedures that are performed at a date prior to year-end are often dependent upon adequate internal controls and when the client will have the information available. Additionally, public company auditors must begin their testing of controls earlier in the year to ensure they are able to test a sufficient sample of controls for operating effectiveness. Some controls may only be performed monthly or quarterly. Thus, the public company auditor must begin testing early in the year so that there is a sufficient number of months or quarters to test.Procedures that may be performed prior to the end of the year are:1. Update fixed asset schedules.2. Examine new loan agreements and other legal records.3. Vouch certain transactions.4. Analyze changes in the client's accounting systems.5. Review minutes of board of directors' meetings.6. If the client has strong internal control, the following proceduresmay be performed with minor review and updating at year-end:(a) Observation of physical inventories;(b) Confirmation of accounts receivable balances;(c) Confirmation and reconciliation of accounts payablebalances.Multiple Choice Questions From CPA Examinations13-22 a. (2) b. (2) c. (3) d. (1)13-23 a. (2) b. (4) c. (1) d. (3)13-24 a. (4) b. (3)Discussion Questions and Problems 13-2513-2613-11* The primary concern in these two items is the separation of duties rather than the existence of the deposit slip and prelisting. The primary test of control procedure must therefore be observation.* The objectives satisfied depend upon what she examines. She might for example examine supporting documents for accuracy and even for account classification. In that event, those two objectives would be added.13-2913-1213-1413-30a. 1. Automated control embedded in computer software2. Manual control whose effectiveness is based significantly onIT-generated information3. Automated control embedded in computer software4. Manual control whose effectiveness is based significantly onIT-generated information5. Manual control whose effectiveness is not significantly relianton IT-generated informationb. 1. The extent of testing of this control could be significantlyreduced in subsequent years if effective controls overprogram and master file changes are in place. Such controlswould increase the likelihood that the inventory softwareprogram that contains the automated control and the relatedinventory master file are not subject to an unauthorizedchange. If the auditor determines that no changes havebeen made to the automated control, the auditor can rely onprior year audit tests of the controls as long as the control istested at least once every third year audit. If the controlmitigates a significant risk, the control must be tested in thecurrent year’s audit.2. The extent of testing of this control could be moderatelyreduced in subsequent years if effective controls overprogram and master file changes are in place. Such controlswould increase the likelihood that the printout of pricesaccurately reflects actual prices used by the system torecord inventory transactions. Adequate controls over themaster file would decrease the likelihood that pricesapproved by the sales and purchasing department managershave been changed without authorization. However,because this control is also dependent on manager review ofcomputer generated output (e.g., a human process subjectto error), some testing may be required each year, althoughthe amount of testing may be reduced by strong generalcontrols.3. The extent of testing of this control could be significantlyreduced in subsequent years if effective controls overprogram and master file changes are in place. Such controlswould increase the likelihood that the inventory softwareprogram that processes the automatic purchase order andthe related inventory master file of product numbers are notsubject to an unauthorized change.4. The extent of testing of this control could be moderatelyreduced in subsequent years if effective controls overprogram changes are in place. Such controls would increasethe likelihood that the purchasing system software programthat identifies purchases exceeding $10,000 per vendorfunctions accurately. However, because this control is alsodependent on manager review of the computer generated exception listing, some testing may be required each year.13-30 (continued)5. Because this control is not dependent on technologyprocesses, the strength of general controls over programand master file changes is likely to not have an impact onthe extent of testing of this review by the sales departmentmanager.13-31a. The performance of interim tests of controls and substantive tests of transactions is an effective means of keeping overtime to aminimum where many clients have the same year-end date.However, this approach requires additional start-up time each timethe auditor enters the field to perform additional tests duringdifferent times of the year. In the case of a small client, start upcosts and training time may require more total time than waitinguntil after December 31.b. Schaefer may find that it is acceptable to perform no additionaltests of controls and substantive tests of transactions work as apart of the year-end audit tests under the following circumstances:1. The results of the tests of the interim period indicate theaccounting system is reliable.2. Inquiries concerning the remaining period may indicate therewere no significant changes in internal control andaccounting procedures.3. The transactions occurring between the completion of thetests of controls and substantive tests of transactions andthe end of the year are not unusual compared to thetransactions previously tested and to the normal operationsof the company.4. Other tests performed at the end of the year do not indicatethat the internal controls are less effective than the auditorhas currently assessed.5. The remaining period is not too long in the circumstances.(Some consensus exists in the profession requiring theremaining period to be three months or less, dependingupon the circumstances.)6. Other matters of concern to the auditor indicate that thelimitation of interim testing is appropriate (i.e., risk ofexposure to legal sanction is not too great; the auditor willprobably be familiar with the client's operations and willdetermine that a reduced control risk is justified; the auditorhas appropriate confidence in the competence of personneland the integrity of management).7. All key controls related to financial reporting are testable atinterim periods by the auditor of a public company who mustissue an opinion on internal controls over financial reporting.(Some key controls may only be performed by the client aspart of the year-end closing process and thus can only betested by the auditor at year end).c. If Schaefer decides to perform no additional tests of controls andsubstantive tests of transactions, depending upon thecircumstances, she may wish to perform analytical procedures,such as reviewing interim transactions for reasonableness ortracing them to their source, comparing balances to previousperiods, or other such procedures, for the remaining period to year-end.d. If Schaefer is auditing a public company, she must performsufficient tests of controls to provide her a basis for issuing anopinion on the operating effectiveness of those controls overfinancial reporting. Schaefer’s approach to performing interim testsof controls in August through November would be appropriate forthe audit of internal control over financial reporting. Schaefer needsto begin testing early enough in the year to ensure that she can testcontrols enough to provide a sufficient basis for reporting oninternal controls over financial reporting. Because some keycontrols may only be performed by the client as part of the year-endclosing process, Schaefer may have to extend her testing beyondNovember since year-end closing controls can only be tested bythe auditor at year end.13-32 a. The sequence the auditor should follow is:3. Assess control risk.1. Determine whether it is cost effective to perform tests ofcontrols.4. Perform tests of controls.2. Perform substantive tests of details of balances.The only logical sequences for parts b through e are shown as follows:EFA B DG H DC DAny other sequence is not cost effective or incorrect. For example: E,A, G, C would be the sequence when there is planned reducedassessed control risk and effective results of tests of controls.b. The sequence is E, A, H, D. The logic was reasonable. The auditorbelieved the internal controls would be effective and it would be costeffective to perform tests of controls. In performing the tests ofcontrols the auditor concluded the controls were not effective.Therefore, expanded substantive tests of details of balances wereneeded.c. The sequence is E, B, G, C. The auditor concluded the internalcontrols may be effective, but it was not cost effective to reduceassessed control risk. The auditor should not have performed tests ofcontrols. It would have been more cost effective to skip performingtests and instead follow the sequence E, B, D.d. The sequence is F, A, G, C. The logic is not reasonable. When theauditor concluded the controls were not effective he or she shouldhave gone immediately to D and performed expanded substantivetests of details of balances.e. The sequence is F, D. The logic was reasonable. The auditorconcluded that internal controls were not effective, therefore theauditor went directly to substantive tests of details of balances andperformed expanded tests.13-33AUDIT PROCEDURES TOOBTAIN ANUNDERSTANDINGOF INTERNALCONTROLTESTS OFCONTROLSSUBSTANTIVETESTS OFTRANSACTIONSANALYTICALPROCEDURESTESTS OFDETAILSOFBALANCES1 E E S E S2 M N S M E3 E E M E S, E*E = Extensive amount of testing.M = Medium amount of testing.S = Small amount of testing.N = No testing.S,E* = Small amount of testing for the gross balance in accounts receivable; extensive testing done for the collectibility of theaccounts.a. For audit 1 the recommended strategy is to maximize the testing ofinternal controls and minimize the testing of the details of all endingbalances in inventory. The most important objective would be tominimize the number of locations that need to be visited. Thejustification for doing this is the quality of the internal controls andthe results of prior years' audits. Assuming that some of thelocations have a larger portion of the ending inventory balance thanother locations, the auditor can likely completely eliminate tests ofphysical counts of some locations and emphasize the locations withlarger dollar balances. The entire strategy is oriented to minimizingthe need to visit locations.b. Audit risk for this audit should be low because of the plans to sellthe business, severe under-financing and a first year audit. Thelack of controls over accounts payable and the large number ofadjusting entries in accounts payable indicate the auditor cannotconsider the internal controls effective. Therefore the plan shouldbe to do extensive tests of details of balances, probably throughaccounts payable confirmation and other end of year procedures.No tests of controls are recommended because of the impracticalityof reduced assessed control risk. Some substantive tests oftransactions and analytical procedures are recommended to verifythe correctness of acquisitions and to obtain information about thereasonableness of the balances.c. The most serious concern in this audit is the evaluation of theallowance for uncollectible accounts. Given the adverse economicconditions and significant increase of loans receivable, the auditormust be greatly concerned about the adequacy of the allowance foruncollectible accounts and the possibility of uncollectible accountsbeing included in loans receivable. Given the internal controls,the auditor is not likely to be greatly concerned about the grossaccounts receivable balance, except for accounts that need to bewritten off. Therefore, for the audit of gross accounts receivablethere will be a greatly reduced assessed control risk and relativelyminor confirmation of accounts receivable. In evaluating theallowance for uncollectible accounts, the auditor should test thecontrols over granting loans and following up on collections.However, given the changes in the economy, it will be necessary todo significant additional testing of the allowance for uncollectibleaccounts. Therefore an "S" is included for tests of details ofbalances for gross accounts receivable and an "E" for the tests ofnet realizable value.13-34a. Factors which could explain the difference in the amount of evidence accumulated in different parts as well as the total time spent on the engagement are:1. Internal control2. Materiality of the account balance3. Size of the populations4. Makeup of populations5. Initial vs. repeat engagement6. Results of the current and previous audits7. Existence of unusual transactions8. Motivation of the client to misstate the financial statements9. Degree of client integrity10. Reliance by third parties on the audited financial statementsFor an example, in the first audit, the partner has apparently made the decision to emphasize tests of controls and substantivetests of transactions and minimize tests of details of balances. Thatimplies effective internal controls and a low expectation ofmisstatement (low inherent and control risk.) In the third audit, thepartner apparently has a high expectation of misstatements, andtherefore believes it is necessary to do extensive tests of controlsand substantive tests of transactions, as well as extensive tests ofdetails of balances. Audit two is somewhere between audit one andthree.。
Intermediate Accounting (10)
Retained Earnings (2014 original) $5,200,000 Less: correction for 2014 inventory 45,000 Retained Earnings (2014 restated) $5,155,000 Note: 2013 inventory error is self-corrected as it was discovered after the books for 2014 were closed
Overstated
Copyright © John Wiley & Sons Canada, Ltd.
9
Example
Given for the year 2014: COGS = $1.4 million Retained Earnings (R/E) = $5.2 million December 31st inventory errors both discovered after 2014 books were closed: 2013: inventory overstated by $110,000 2014: inventory overstated by $45,000 Calculate correct 2014 COGS and R/E at Dec. 31, 2014
Copyright © John Wiley & Sons Canada, Ltd. 10
Example
COGS (as originally stated in 2014) $1,400,000 Add: December 31, 2014 overstatement error 45,000 1,445,000 Less: December 31, 2013 overstatement error 110,000 Corrected 2014 COGS $1,335,000
Inventory Management(仓储管理)
Beni Asllani University of Tennessee at Chattanooga
Lecture Outline
Elements of Inventory Management Inventory Control Systems Economic Order Quantity Models Quantity Discounts Reorder Point Order Quantity for a Periodic Inventory System
Copyright 2006 John Wiley & Sons, Inc.
12-4 12-
Inventory and Supply Chain Management
Bullwhip effect
demand information is distorted as it moves away from the end-use customer endhigher safety stock inventories to are stored to compensate
Seasonal or cyclical demand Inventory provides independence from vendors Take advantage of price discounts Inventory provides independence between stages and avoids work stop-pages stopCopyright 2006 John Wiley & Sons, Inc. 12-5 12-
Lead time Order Order placed receipt
inventory management 库存管理 外文翻译
Floyd D. Hedrick, Library of Congress, Washington, D.C.Editor: Jeannette Budding, Communications ManagerNational Association of Purchasing ManagementInventory managementAbstractInventory management, or inventory control, is an attempt to balance inventory needs and requirements with the need to minimize costs resulting from obtaining and holding inventory. There are several schools of thought that view inventory and its function differently. These will be addressed later, but first we present a foundation to facilitate the reader's understanding of inventory and its functionInventory management is inventory management in short .As an important inventory of liquid assets, its existence is bound to take up a lot of liquidity. In general, inventories of industrial enterprises accounted for about 30% of the total assets of commercial circulation enterprises is even higher, the management of utilization is directly related to the occupation of the level of corporate funds and asset efficiency. Therefore, a business to maintain high profitability, should be attached great importance to inventory management. Inventory management at different levels, the company's average occupancy level of funding is a big difference. Through the implementation of proper inventory management methods to reduce the level of the average amount of funds used to improve the inventory turnover rate and total assets, will ultimately improve the economic efficiency of enterprises.Keyword：Inventory；ManagementChapterⅠ Inventory DefinitionInventory is a quantity or store of goods that is held for some purpose or use (the term may also be used as a verb, meaning to take inventory or to count all goods held in inventory). Inventory may be kept "in-house," meaning on the premises or nearby for immediate use; or it may be held in a distant warehouse or distribution center for future use. With the exception of firms utilizing just-in-time methods, more often thannot, the term "inventory" implies a stored quantity of goods that exceeds what is needed for the firm to function at the current time (e.g., within the next few hours).Chapter II The meaning of Inventory Management2.1maintain the listWhy would a firm hold more inventory than is currently necessary to ensure the firm's operation? The following is a list of reasons for maintaining what would appear to be "excess" inventory.Table 1January February March April May June Demand 50 50 0 100 200 200 Produce 100 100 100 100 100 100 Month-end inventory 50 100 200 200 100 0Table 11-6 month a business demand, production, end balance situation2.2 Meet demandIn order for a retailer to stay in business, it must have the products that the customer wants on hand when the customer wants them. If not, the retailer will have to back-order the product. If the customer can get the good from some other source, he or she may choose to do so rather than electing to allow the original retailer to meet demand later (through back-order). Hence, in many instances, if a good is not in inventory, a sale is lost forever.2.3 Keep operations runningA manufacturer must have certain purchased items (raw materials, components, or subassemblies) in order to manufacture its product. Running out of only one item can prevent a manufacturer from completing the production of its finished goods.Inventory between successive dependent operations also serves to decouple the dependency of the operations. A machine or workcenter is often dependent upon the previous operation to provide it with parts to work on. If work ceases at a workcenter, then all subsequent centers will shut down for lack of work. If a supply of work-in-process inventory is kept between eachworkcenter, then each machine can maintain its operations for a limited time, hopefully until operations resume the original center.2.4 Lead timeLead time is the time that elapses between the placing of an order (either a purchase order or a production order issued to the shop or the factory floor) and actually receiving the goods ordered. If a supplier (an external firm or an internal department or plant) cannot supply the required goods on demand, then the client firm must keep an inventory of the needed goods. The longer the lead time, the larger the quantity of goods the firm must carry in inventory.A just-in-time (JIT) manufacturing firm, such as Nissan in Smyrna, Tennessee, can maintain extremely low levels of inventory. Nissan takes delivery on truck seats as many as 18 times per day. However, steel mills may have a lead time of up to three months. That means that a firm that uses steel produced at the mill must place orders at least three months in advance of their need. In order to keep their operations running in the meantime, an on-hand inventory of three months' steel requirements would be necessary.2.5 HedgeInventory can also be used as a hedge against price increases and inflation. Salesmen routinely call purchasing agents shortly before a price increase goes into effect. This gives the buyer a chance to purchase material, in excess of current need, at a price that is lower than it would be if the buyer waited until after the price increase occurs.2.6 Smoothing requirementsSometimes inventory is used to smooth demand requirements in a market where demand is somewhat erratic. Consider the demand forecast and production schedule outlined in Table1Notice how the use of inventory has allowed the firm to maintain a steady rate of output (thus avoiding the cost of hiring and training new personnel), while building up inventory in anticipation of an increase in demand. In fact, this is often called anticipation inventory. In essence, the use of inventory has allowed the firm to move demand requirements to earlier periods, thus smoothing the demand.Chapter III Controlling InventoryOften firms are given a price discount when purchasing large quantities of a good. This also frequently results in inventory in excess of what is currently needed to meet demand. However, if the discount is sufficient to offset the extra holding cost incurred as a result of the excess inventory, the decision to buy the large quantity is justified.Firms that carry hundreds or even thousands of different part numbers can be faced with the impossible task of monitoring the inventory levels of each part number. In order to facilitate this, many firm's use an ABC approach. ABC analysis is based on Pareto Analysis, also known as the "80/20" rule. The 80/20 comes from Pareto's finding that 20 percent of the populace possessed 80 percent of the wealth. From an inventory perspective it can restated thusly: approximately 20 percent of all inventory items represent 80 percent of inventory costs. Therefore, a firm can control 80 percent of its inventory costs by monitoring and controlling 20 percent of its inventory. But, it has to be the correct 20 percent.The top 20 percent of the firm's most costly items are termed "A" items (this should approximately represent 80 percent of total inventory costs). Items that are extremely inexpensive or have low demand are termed "C" items, with "B" items falling in between A and C items. The percentages may vary with each firm, but B items usually represent about 30 percent of the total inventory items and 15 percent of the costs. C items generally constitute 50 percent of all inventory items but only around 5 percent of the costs.By classifying each inventory item as an A, B or C the firm can determine the resources (time, effort and money) to dedicate to each item. Usually this means that the firm monitors A items very closely but can check on B and C items on a periodic basis (for example, monthly for B items and quarterly for C items).Another control method related to the ABC concept is cycle counting. Cycle counting is used instead of the traditional "once-a-year" inventory count where firms shut down for a short period of time and physically count all inventory assets in an attempt to reconcile any possible discrepancies in their inventory records. When cycle counting is used the firm is continually taking a physical count but not of total inventory.A firm may physically count a certain section of the plant or warehouse, moving on to other sections upon completion, until the entire facility is counted. Then the process starts all over again.The firm may also choose to count all the A items, then the B items, and finally the C items. Certainly, the counting frequency will vary with the classification of each item. In other words, A item may be counted monthly, B items quarterly, and C items yearly. In addition the required accuracy of inventory records may vary according to classification, with A items requiring the most accurate record keeping.Chapter IV SummaryTime inventory management is now faced with the defects.The advent, through altruism or legislation, of environmental management has added a new dimension to inventory management-reverse supply chain logistics. Environmental management has expanded the number of inventory types that firms have to coordinate. In addition to raw materials, work-in-process, finished goods, and MRO goods, firms now have to deal with post-consumer items such as scrap, returned goods, reusable or recyclable containers, and any number of items that require repair, reuse, recycling, or secondary use in another product. Retailers have the same type problems dealing with inventory that has been returned due to defective material or manufacture, poor fit, finish, or color, or outright "I changed my mind" responses from customers.Finally, supply chain management has had a considerable impact on inventory management. Instead of managing one's inventory to maximize profit and minimize cost for the individual firm, today's firm has to make inventory decisions that benefit the entire supply chain.References[1] D. Bertsekas. Dynamic Programming and Optimal Control, (Volumes1 and 2). Athena Scientific, 2005.[2] A. Burnetas and P. Ritchken. Option pricing with downward-slopingdemand curves: The case of supply chain options. Management Science, 51(4):566–580, 2005.[3] F. Chen and M. Parlar. Value of a put option to the risk-aversenewsvendor. IIE Transactions, 39(5):481–500, 2007.[4] J. Cox, S. Ross, and M. Rubinstein. Option Pricing: A SimplifiedApproach'. International Library of Critical Writings in Economics,143:461–495, 2002.[5] R. Levine and S. Zervos. Stock markets, banks, and economic growth.American Economic Review, 88(3):537–58, June 1998.[6] E. L. Porteus. Foundations of Stochastic Inventory Theory. StanfordUniversity Press, Stanford, 2002.[7] J. Primbs. Dynamic hedging of basket options under proportionaltransaction costs using receding horizon control. Preprint, 2007.Floyd D. Hedrick, Library of Congress, Washington, D.C.Editor: Jeannette Budding, Communications ManagerNational Association of Purchasing Management库存管理摘要库存管理或库存控制，是为了平衡库存的需要和要求，有必要从降低成本获得和持有的库存造成的。
Chapter 13. Contractual Instruments
UNITED NATIONS PROCUREMENT MANUALPM T ABLE OF C ONTENTSChapter 13 Contractual Instruments∙13.1 Introduction Contractual Instruments∙13.2 Contractual Instruments used by the United Nations∙13.3 Internal Purchase Orders∙13.4 Blanket Purchase Order∙13.5 Purchase Order∙13.6 Customized Contracts∙13.7 Standard Contract Documentation∙13.8 Standard Contract Elements∙13.9 Systems Contract∙13.10 Institutional or Corporate Contractor Agreement∙13.11 Letters of Assist∙13.12 Procedures for Use of Letters of Assist∙13.13 Other Contractual Instruments13.1 Introduction Contractual Instruments1. In accordance with Financial Rule 105.18(a), all procurement actions over the monetary value ofspecific threshold(s) established by the ASG/OCSS, as may be changed from time to time, shall be in writing. The minimum threshold for written Contracts is currently set at US$ 2,500. The Rule also requires that certain details be specified in such written Contracts, as appropriate.2.In accordance with Financial Rule 105.18(b) electronic means of data interchange may be used tosatisfy the requirement of written Contracts, provided the ASG/OCSS has ensured that the system used to exchange information is capable of ensuring authentication and confidentiality of such information. Thus, if these conditions are met, a binding and enforceable Contract may be formed by electronic means of data interchange, for instance, by exchanging e-mail over the Internet. If such a system is used, the Procurement Officer is primarily responsible for preserving theinformation in a safe and secure manner, with assistance from the information technologies unit as may be necessary.3.Every UN contractual instrument for the purchase or lease of goods, services and otherrequirements such as works (i.e., construction contracts) shall include a reference by web link to the appropriate standard form of the UN General Conditions of Contract (UNGCC), unless a specific vendor has no web-access, in which case the Procurement Officer shall send this vendor the appropriate UNGCC form along with the solicitation documents. The version of the UNGCC to be used depends upon the Deliverables being acquired. Commonly used standard UNGCC forms are attached as Annexes D-9 through D-12. These forms are also available on the UN/PD website. Such forms of UNGCC include the following:a.United Nations General Conditions of Contract for the Provision of Goods, (Annex D-9);b.United Nations General Conditions of Contract for the Provision of Services, (Annex D-10);c.United Nations General Conditions of Contract for the Provision of Goods and Services,(Annex D-11); andd.United Nations General Conditions of Contract for De Minimus Field Contracts, (Annex D-12).4.The Procurement Officer may assume that the most current forms are those posted on the UN/PDwebsite and those linked to this Manual. The Procurement Officer must also consider the possibility of having to combine specific provisions of several forms in order to protect the Organisation adequately. In those situations, the Procurement Officer may, with the approval of the Director, UN/PD, consult with OLA for the preparation of the proper form to use.5.As indicated in Chapter 9 Section 9.17, Solicitation Documents shall require Vendors to specify, aspart of their Submissions, that they have accessed, read, understood and accepted the UNGCC for the specific Deliverables without reservation, unless they clearly state in their Submission their reservations or objections and provide alternative language. The Solicitation Document shall state that the extent of non-compliance with the UNGCC will be a factor in the evaluation process.13.2 Contractual instruments used by the United Nations1.The UN uses the following contractual instruments:a.Blanket Purchase Ordersb.Purchase Ordersc.Customized Contracts (including Systems Contracts)d.Institutional Contract Agreements (ICAs)e. Letters of Assist.13.3 Internal Purchase Orders1.Internal purchase orders are issued internally within the UN to obligate funds against Contracts forfuture payment for goods or services provided under a Contract and are not sent to Vendors.Thus, an internal PO is not a contractual instrument with a Vendor, but an internal UN document solely used to obligate available funds. An original of the Internal Purchase Order shall be signed by the duly authorized Procurement Officer or other authorized official and placed in the procurement case file. A copy shall be transmitted to the Requisitioner and the Accounts Division, as applicable.2.The Procurement Officer shall ensure that funds for a proposed Contract have been approved andthen obligate the funds by issuing an Internal Purchase Order. If all procurement activities related to the acquisition have been conducted at HQ, but payment for such goods or services is to be arranged by another office, such as an OAH or a Field Mission, the Procurement Officer must have received a certified and funded Requisition before the Internal Purchase Order is issued.13.4 Blanket Purchase Order1.Upon request, the Procurement Office may arrange for certain departments and offices to orderlimited quantities of specified products and services through a “Blanket Purchase Order” (BPO).The BPO is basically a simplified form of Systems Contract (see Chapter 13 Section 13.9). This instrument is usually reserved for repetitive orders of up to US$ 50,000, when items of low-value are not held in stock by the UN, services are required on short notice or prices conform to a set pattern in the trade (e.g., prices found in catalogues). BPOs should not be used for large volumes of items even when they are of low value.2.In this context “low-value” means US$ 2,500.00 at HQ and OAHs/Field Missions, unless differentvalue has been authorized. These amounts may be changed from time to time by the UN official authorized to set such amounts.3.The Procurement Officer shall establish Blanket Purchase Orders on a fiscal year basis, forspecific items based on Requisitions received from the departments or offices concerned. The Solicitation procedures described in Chapter 9 shall be followed in selecting Vendors to participate.4.BPOs for goods and/or services can be entered into with multiple Vendors. The UN has less costcontrol over the Vendor when using a BPO in that the initial market survey only gives a relative indication of prices for a representative sample of goods or services in a category. Essentially, the vendor is free to charge as it sees fit at the time an actual order is placed. Therefore, BPOs should only be used to purchase items that are difficult to specifically identify and quantify. Examplesinclude spare parts, electrical components, engineering workshops components such as nails, bolts, etc. BPOs shall include a specified term (duration), a maximum not-to-exceed contract amount, instructions about procedures/authorization for ordering against the BPO, specifications about delivery procedures and terms of payment, provisions for possible price escalations and other appropriate terms and conditions.5.The Requisitioner must identify the types of goods or services that may be needed under the BPO.The requirements should include a sample ‘shopping list’ indicating as wide a range of products or services as possible, maximum delivery lead time, and if appropriate, relative maximum quantities of those items. The Procurement Office will use the sample ‘shopping list’ to perform a Market Survey, the result of which will be used to select a Vendor. The Requisitioner is not locked into ordering the items on the “sample shopping list” but may place orders for any item that falls into the product/service category covered by BPO.6.Requisitioners directly place orders against the BPO using the established Work Order/TaskOrder, copies of which should be provided to the Vendor, Receiving and Inspection, Property Control and Inventory Unit and Finance Section. Requisitioners may contact the Vendor directly to obtain specific information about the goods or services being requested, including catalogue numbers and pricing. The Work Order/Task Order must reference the BPO and include the specific items or services, quantities or volumes, pricing at the time of order and desired delivery date.7.The Requisition must specify those individuals authorized to sign Work Orders/ Task Ordersagainst the BPO. In order to maintain proper administrative and financial controls it is strongly recommended that authorisation of Work Orders/ Task Orders be limited to the Certifying Officer responsible for that cost center. It is the responsibility of the Requisitioner to keep records of expenditures against, and the unspent balance of, a BPO.8.Invoices against a BPO should reference both the BPO contract number and the Work Order/TaskOrder number. In most other respects, the ordering and administrative procedures, including receiving and inspection, property control and inventory and invoice processing are the same for a BPO as they are for other forms of Contracts and Purchase Orders.9.The total sum drawn upon a BPO shall be limited to a maximum of [US$ 50,000] in each fiscalyear and shall not exceed the face value of the BPO. The BPO shall specify the term for which it is valid, which shall not be longer than the end of the fiscal year in which the BPO was issued. In order to replace an expired BPO, a new BPO shall be issued.10.After a BPO has been issued, the departments or offices concerned may proceed to order fromthe selected Vendor, in accordance with the terms of the BPO, by issuing Purchase Orders. All such orders must include the BPO number, and the terms and conditions of the BPO shall govern the purchase in all respects.11. The Procurement Officer shall evaluate each BPO at the end of the year to determine whether itshould be renewed. The Section Chief/ Director, UN/PD or the CPO may approve issuance of a BPO to the same Vendor, if so requested by the departments or offices concerned, for up to three consecutive years without having a new Solicitation for the items or services covered by the BPO13.5 Purchase Order1. A Purchase Order (PO) is an appropriate contractual instrument only when there is no contract orin case of a Systems Contract.2.The PO serves both as the formal Contract and order to, or the means by which the UN acceptsan offer from, the Vendor to furnish the Deliverables. The issuance of a PO obligates the available funds for the goods being procured against the appropriate Budget Account Codes (BAC). A sample PO is attached as Annex D-13A.3.The terms and conditions set forth on the front page of the PO, the general conditions annexed tothe PO, and any attachments or documents referred to and explicitly made part of the PO, constitute the Contract between the UN and the Vendor and govern the parties’ respective obligations. If necessary, the Procurement Officer may add special instructions to the Vendor under the POs which then should be made part of the Contract. A list of commonly used special instructions is attached as Annex D-13B. The Solicitation Documents and the PO shall state that additional or inconsistent provisions proposed by the Vendor shall not bind the UN, unless agreed to in writing by a duly authorized official of the UN in order to avoid a “Battle of the Forms”. Any modification of the applicable UNGCC annexed to the PO or attached or referred to in a separate document shall be handled in accordance with the procedures set forth in Chapter 9 Section 9.17 (See also Chapter 9 Section 9.18, 9.42, and Chapter 13 Section 13.8.4.The Procurement Officer shall send a copy of the countersigned original, preferably in electronicformat, to the Requisitioner and the Accounts Division.5.For low-value purchases, currently fixed at under US$ 2,500, the Procurement Officer or otherauthorized official shall follow the procedures set forth in Chapter 9 Section 9.15.13.6 Customized Contracts1. General1. A Contract with originally prepared wording, rather than a printed set of standardizedprovisions, shall be used when the terms and conditions of the proposed transaction with the Vendor are complicated or require detailed written elaboration to ensure that the respective rights and obligations of the UN and the Vendor are clearly and fully set out and understood by both parties to the transaction.2. While formalizing a Contract, Financial Rule 105.18(b) should be taken into account, in order todetermine whether electronic means of data interchange can be used to conclude the Contract (See Chapter 13 Section 13.1 paragraph 2).13.7 Standard Contract Documentation1.A customized Contract normally consists of the following documents in priority order:a.An “umbrella” document containing specific contractual provisions, including any terms agreedto in the course of negotiations with the Vendor; such provisions may be based on model agreements prepared by OLA or original wording prepared by the Procurement Officer or agreed to with the Vendor in the course of negotiations to address issues not covered by such model agreements. The UN/PD Contracts Officer or, in the case of Field Missions, the Legal Officer should be consulted for a review of wording not covered by model agreements.b.The appropriate UNGCC, as they may have been amended with required internal UN reviewsand approval Chapter 9 Section 9.17, Chapter 11 Section 11.42 and Chapter 13 Section 13.1 paragraphs 4 and 5).;c.Relevant portions of the Solicitation Documents, including Specifications, TOR or SOW andany written clarifications provided by the UN during the Solicitation process that clarify such Specifications, TOR or SOW or elaborate on the parties’ respective obligations as set forth in the Solicitation Documents;d.The Vendor’s Submission, including any Best and Final Offer, provided in response to an RFQ,ITB or RFP.2.Other documents may be included in their entirety as Annexes to the Contract or incorporated byreference as necessary (e.g., written records of bid conferences, discussions, letters, samples, bonds) to the extent such documents are relevant to the Contract.3.In the alternative, relevant parts of the documents referred to in paragraphs (1)(c), 1(d) and (2) ofthis Section may be made part of the umbrella document or included in a separate annex prepared for such purpose. If the Procurement Officer decides to use this alternative method in preparing the Contract, he/she should normally request OLA to review and clear the draft before it is presented to the Vendor, unless the Director, UN/PD decides that such review and clearance is unnecessary.13.8 Standard Contract Elements1.The Procurement Officer shall prepare each Contract in a proper form, subject to clearance byOLA, as appropriate, in accordance with the terms of Chapter 11 Section 11.42. Several model agreements have been developed in cooperation with OLA to cover many procurement needs.When such a model is available, the Procurement Officer is expected to use such model inpreparing a draft of the Contract, unless he/she determines there are special reasons not to use the model. In the course of negotiations with the Vendor, the terms and conditions of the model agreement may be modified to properly reflect the agreed terms and conditions between the parties.2.If an appropriate model agreement does not exist, the Procurement Officer is primarily responsiblefor having a customized Contract prepared that addresses all the relevant issues raised by the specific case. In this situation, a model agreement may still serve as a starting point for the drafting of the proposed Contract and then be modified to take account of the specific details or complexities of the acquisition.3.The following elements are illustrative of what should be included in the Contract and, in mostcases, they should already have been reflected in the contract attached to the Solicitation Documents:a. Identification of the Parties.b. Order of Precedence.c. Specifications, TOR or SOW.d. Duration/Term of Contract.e. Responsibilities of the Vendor.f. Responsibilities of the UNg. Contract Monitoring and Supervision.h. Reporting requirements.terms.i. Paymentj. Paymentmethod(s).k. Liquidated Damages Clause (See Chapter 9 Section 9.35).l. Performance Bond (See Chapter 9 Section 9.34)m. Additional insurance requirements.n. Warrantieso. Amendment or Modification of Contractp. Notice provisions.q. Signatures of the parties.13.9 Systems Contract1.Systems Contracts are used when the Procurement Officer determines, in consultation with theRequisitioners based on previous experience and project needs, that the Deliverables to be procured are required on a recurring basis over an extended period of time. Such Contracts facilitate prompt processing of procurement requirements and minimize the number of time-consuming and repetitive Solicitations for the same item(s). The unit price(s) offered by the Vendors should also be lower due to the larger volumes the selected Vendor will be expected to deliver, thereby making it possible to realize economies of scale for both parties. “Performance Based Contracting” and other techniques such as “Incentive Contracting” may be useful tools in developing Systems Contracts.2.Systems Contracts can be used for a broad range of Deliverables. The simplest SystemsContracts are the BPOs (see Chapter 13 Section 13.4). At HQ, Systems Contracts have been used for the provision of office products and equipment, and computer and related help-desk services. At the Field Mission level, a more complex version of the Systems Contract, which permits a Field Mission to order directly from several Vendors, has been used.3.Systems Contracts shall normally be awarded after competitive bidding, generally using a Requestfor Proposals. Procurement Officers shall work closely with Requisitioners to develop Acquisition Plans that will enable the establishment of Systems Contracts. The UN usually enters into Systems Contracts on a non-exclusive basis.4.The use of Systems Contracts reduces the number of times Vendors are invited to participate incompetitive bidding for the Deliverables needed. Therefore, the initial duration of Systems Contracts may be for an initial period of three years with an option to extend for an additional two years. Systems Contracts shall not be extended for more than two consecutive terms of one year each. Accordingly, requirements that are the subject of Systems Contracts shall normally be subject to competitive bidding, at a minimum, every five years.5.The intent of Systems Contracts is to secure competitive prices for the duration of the Contract.However, Systems Contracts may provide that price(s) will be reviewed periodically during the term of the Contract based on specified criteria, such as changes in the Vendors’ costs of labour or material, provided the Solicitation Documents made clear that Vendors were allowed to quote prices subject to such periodic review. In such cases, the Contract should specify how often such reviews will take place and the criteria to use for adjusting the price(s), including any limits on the amounts by which the prices are adjusted.6.The UN is not obliged to forecast the precise quantities to be ordered under a Systems Contract.However, in order to maximize the benefit of using Systems Contracts, the Solicitation Document and the Contract shall, to the extent possible, specify a minimum number and indicate a non-binding maximum number of Deliverables to be procured during the term of the Contract. The Contract must also specify the NTE amount so that appropriate internal approvals for increased amounts will be obtained in a timely fashion. If possible, Systems Contracts shall include volume discounts.7.Systems Contracts require intensive monitoring and administrative support, primarily by theRequisitioner, to ensure that the selected Vendors perform satisfactorily and in accordance with the terms and conditions of the Contract and that NTE amounts are not exceeded. Typically, the Requsitioner should notify the Procurement Office when 75% of the NTE amount has been reached. In addition, the System Contract shall hold the vendor responsible to notify the Procurement Office when 75% of the NTE amount has been reached.8.In order to obligate funds and facilitate the processing of invoices for orders under SystemsContracts, the Procurement Officer or other authorized official shall place orders by the issuance of Purchase Orders for the deliverable(s) requested by the Requisitioner. Such POs shall clearly refer to the Systems Contract, and the prices contained therein must reflect those agreed to in the Systems Contract. Since the Systems Contract, including the appropriate UNGCC, should govern the transaction, it is very important that POs do not include any terms or conditions that conflict with the terms and conditions of the Systems Contract.9.Systems Contracts should be available for use by the entire UN system, unless the Requisitionerprovides valid reasons why they should be limited to certain parts of the UN system (e.g., technical limitations on the ability to monitor the volume of orders under the Contract). Accordingly, HQ, OAHs/Field Missions, as well as other UN entities, may benefit from such contracts. When any offices outside UN/PD issue Purchase Orders under a Systems Contracts, a copy thereof shall be furnished to the originating Requisitioner at HQ. The Requisitioner shall monitor the utilization of the Systems Contract, and inform UN/PD in writing when more than 75% of the allocated funds have been committed.13.10 Institutional or Corporate Contractor Agreement1. IntroductionThe Institutional or Corporate Contractor Agreement (ICA) is used by UN/PD to contract with institutions or corporate bodies for the provision of outside expertise or professional services. The ICA is a simplified form of a contract and is used where the project is straight-forward and not complex. Issuance of an ICA also obligates the funds allocated for the project. For more complex projects, a properly customized Contract should be used.2.Detailed provisions for contracting with institutional or corporate Contractors are contained inAdministrative Instruction ST/AI/327 dated 23 January 1985. The standard form of an ICA is attached as Annex D-14.3.The IMIS ICA report and its conditions of service shall constitute the Contract between the parties,and Form PT.141B shall be used where appropriate.4.Any changes to the terms of the ICA shall be subject to the approval of the Director, UN/PD.5.Institutional or Corporate Contractors.a.The temporary services of individuals required by the Organisation from time to time may beobtained by their engagement under a Contract entered into directly with an institution or a corporation with whom they are affiliated. The functions to be performed by the Vendor and a time schedule for execution of the project shall be specified in the Contract.6.ICAs may be used to procure services in such areas as interpretation, translation, editing,language training, public information, secretarial work, and clerical functions. In addition, ICAs may be used to procure consultancy services involving analysis of substantive issues, direction of seminars or training courses, preparation of documents for conferences, and writing of reports on matters requiring special expertise.7.The selection of the institution or corporation shall follow all the policies and procedures containedin the Financial Rules and Regulations and this Manual for the selection of Vendors, including competitive bidding and submission to the HCC or LCC, if required.8.Legal Statusa.An institutional or corporate contractor shall be considered as having the legal status of anindependent contractor under the ICA. The Vendor’s personnel and subcontractors shall not be considered in any respect as employees or Agents of the UN.rmation to be Included in the Request for an ICAa.Each request for an ICA shall include in the electronic transmission from IMIS to UN/PD, adetailed scope of work (to explain the work to be performed by the contractor), an estimated time frame for the work, the time lines for the various stages of the Contract, details of any payment on account in advance or progress payments in accordance with Financial Rule 105.19(b), the total Contract price, and the name and telephone number of the Requisitioner’s contact person.13.11 Letters of Assist1.Conditions for use of a Letter of Assist (LOA). LOAs may be issued by the USG/DFS in support ofField Missions only in request of goods and/or services to be provided by a government that are:a.Goods of a strictly military nature or use;b. Not of strictly military nature or use, but are:i.Goods that are required in such volume that except through a government, arenot available other than through piecemeal purchases and the requirements of theField Mission render piecemeal procurement impractical;ii.Transportation services for the movement of UN military personnel or goods toor from a Field Mission area which are not readily available commercially or which,if provided commercially, are more expensive or on a schedule that is unacceptableand would likely cause operational disruptions.iii.Dietary or other requirements unique to a contingent, which are available onlyfrom the country of the individual contingent, and procurement of which is facilitatedor expedited by procurement through the government of the contingent, providedthat the cost to the UN of such procurement is not higher than the cost of the sameitems if procured through commercial sources; oriv.Ammunition.3.Under exceptional circumstances the ASG/OCSS may delegate authority to the head of individualField Missions to issue LOAs only in respect of goods and services to be provided by a government:a.When the government can facilitate or expedite the delivery, and the costs to the UnitedNations of such procurement are not higher than those that would have been incurred if the procurement had been effected commercially; orb.When the goods or services are not readily available commercially;c.Concurrence with the level of reimbursement for LOAs shall be obtained from the Chief UN/PDfor LOAs exceeding US$ 200,000. For LOAs below US$ 200,000 the USG/DFS may issue an LOA without requiring UN/PD’s concurrence.4. A submission to the HCC is required for all LOA cases exceeding US$ 200,000.5.The use of LOAs shall be discontinued when circumstances or conditions that gave rise to theiruse no longer exist.6. A standard LOA is attached as Annex D-15.13.12 Procedures for use of Letters of Assist1.The ASG/DFS is authorized pursuant to Financial Rule 105.13 to sign and issue LOAs. Beforeissuing an LOA, the ASG/DFS shall ensure that:a.The Requisitioning UN department has sent a memorandum to UN/PD proposing the enteringinto an LOA as an exception to the use of a formal method of solicitation. The memorandum to UN/PD shall detail the following:i whether the conditions set forth in Section 13.9.1 are met;ii why a formal method of solicitation would not give satisfactory results;iii attach all related documentation, including a detailed description of the requirement, the reasons for the selection of a government, the name of the proposed governmentcounterpart, the government’s proposal and a draft LOA; and,iv the basis of the costs to the UN, including a statement that budgetary provisions for the LOA are available, and an obligating document is issued as required under Financial Rule105.7.b.That the requisitioning department keeps on file all documents related to the issuance of anLOA;c.UN/PD has concurred positively in writing to the requisitioning department.。
Inventory.ppt
Determining Inventory Quantities
Goods in Transit
Illustration 6-1 Terms of sale
Ownership of the goods passes to the buyer when the
Chapter 6 Inventories (存貨)
Instructor: Chih-Liang Julian Liu Department of Industrial and Business Management Chang Gunng Objectives
at end of the accounting period.
Determining Inventory Quantities
Determining Ownership of Goods (商品所有權) Goods in Transit (在途存貨)
Purchased goods not yet received.
Question
Goods in transit should be included in the inventory of the buyer when the:
a. public carrier accepts the goods from the seller.
b. goods reach the buyer. c. terms of sale are FOB destination. d. terms of sale are FOB shipping point.
Chapter 6 Inventories
1. Describe the steps in determining inventory quantities (存貨數量).
CH13Types of Inventory(运营管理,英文版)
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield
Chapter 13, Slide 2
Chapter 13, Slide 9
What is the “Best” Order Size Q?
Determined by: • Inventory related costs
– Order preparation costs and setup costs – Inventory carrying costs – Shortage and customer service costs
Chapter 13, Slide 16
Sample Problems
• Pam runs a mail-order business for gym equipment. Annual demand for the TricoFlexers is 16,000. The annual holding cost per unit is $2.50 and the cost to place an order is $50. What is the economic order quantity?
Total Cost = Annual Holding Cost + Annual Ordering Cost
= [(Q/2) × H] + [(D/Q) × S] How do these costs vary as Q varies? Why isn’t item cost for the year included?
chapter8-inventory
Example 2: closing inventory (p.125)
Question: We shall continue the example of the Umbrella Shop into its next accounting year, 1 October 20X5 to 30 September 20X6. During the course of this year, Perry P Louis purchased 40,000 umbrellas at a total cost of $95,000. During the year he sold 45,000 umbrellas for $230,000. At 30 September 20X6 he had 5,000 umbrellas left in inventory, which had cost $12,000. What was his gross profit for the year?
- 1、下载文档前请自行甄别文档内容的完整性，平台不提供额外的编辑、内容补充、找答案等附加服务。
- 2、"仅部分预览"的文档,不可在线预览部分如存在完整性等问题,可反馈申请退款(可完整预览的文档不适用该条件!)。
- 3、如文档侵犯您的权益，请联系客服反馈,我们会尽快为您处理(人工客服工作时间：9:00-18:30)。
• ( c) after
• -check sequence of inventory sheets • -check client’s computation of final figure • -trace own test count items through to final inventory sheets • -check replies from third parties • -inform management of any problems • -follow un cut-off details • -ensure necessary adjustments to book inventories have been made (where records are maintained)
Lecture example
(1) Mrs Ishbel Curbar, assistant chief accountant, has overall responsibility for the inventory count but she is to be assisted by Mr Jack Farditch, the warehouse manager, to whom the inventory counting teams are to report, and who will be responsible for the detailed organisation of the count. (2) Five inventory count teams are to carry out the actual count, each team to be responsible for a predetermined section of the warehouse. Each team comprises 2 persons, one from the accounting department and the other from the warehouse.
• 1.2 attendance a the inventory count
• (a) Before • (i) planning
• -review working papers for previous year to identify risks and familiarise yourself with the inventories • -determine arrangements with management in advance • -inventories held by/for third parties-what arrangements have been made? • -review client’s inventory count instructions , P 291 • -investigation of differences (where inventory records exist) • -consider the need for an expert
• Quantity
– Year end inventory count – Perpetual inventory records
• Valuation
– IAS 2
Lower of NRV
• cut-off
Cost
• 1 the physical inventory count
• -when inventory is material to the statements, the auditor should obtain audit evidence by attendance at physical counts • -where the count is not attended on the date planned, the auditor should take or observe some physical counts on an alternative date • -where attendance is impracticable, auditors should consider whether sufficient evidence is available to avoid a qualification of the audit report
Lecture example
Required
You have been provided with the following inventory count instructions by your client. Identify 5 matters that you believe will require action by management if the inventory count is to be effective. Explain how the matters could be rectified.
• (ii) determine procedures to cover a representative selection of inventories
• (b) During :
• -ensure staff are following the inventory counting instructions • -test counts from the inventory sheets and from the inventory sheets to the inventories • -note damaged, old or obsolete inventories • -review WIP for stage of completion • -inventories held by client for third parties: ensure excluded from count • -record the number of the last GRN and the last GDN • -form an overall impression of inventory levels • -photocopy inventory sheets
Lecture example
(3) Each inventory count team is to meet Mr Farditch at 07.30 hours on 29 March 20X1 and will be provided with pre-numbered and pre-printed inventory sheets for the section of the warehouse for which they are responsible. These inventory sheets have been prepared by the inventory control department and show the balance of each inventory item on hand as shown on the inventory records held independently of the warehouse.
Lecture example
(5) Each inventory count sheet is to be signed by the senior member of the count team and the bin or rack cards held in the warehouse are to be adjusted, if necessary, to actual quantities counted. All cards are to be initialled to show that the count has been made.
‘
(4) During the count both members of the inventory count team are to count the inventories independently of each other. In the event of differences arising between inventories counted and the quantity shown on the inventory sheets, the quantity counted is to be entered alongside the original quantity and must be initialled by the senior member of the count team.
(6) Any goods that appear to be in poor condition are to be deducted from the quantity appearing on the inventory sheets, such action again to be supported by initials of the senior member of the count team. (7) Any queries during the count are to be referred to Mr Farditch to whom inventory sheets are to be returned at the conclusion of the count. Mr Farditch is responsible for ensuring that all inventory count sheets have been returned and for forwarding them to Mrs Curbar for valuation.