Being statutory auditor of JAL Limited, a company engaged in manufacturing of chemicals, CA Gopika has understood that company is expected to have…

Audit procedures to verify existence and valuation assertions for work-in-progress are as under: Attend inventory count in accordance with SA 501 and understand how work in progress is arrived at.Evaluate work of management expert, if any, in this regard.Ascertain how the various stages of production/ value additions are measured and in case estimates are made, understand the basis for such estimates.Ascertain what elements of cost are included. If overheads are included, ascertain the basis on which they are included and compare such basis with the available costing and financial data/ information maintained by the entity.Ensure that material costs exclude any abnormal wastage factors.