What are the substantive analytical procedures that can be used to test inventory and related account balances ?
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- Compare raw material, finished goods, and total inventory turnover to previous periods' and industry averages.
- Compare days outstanding in inventory to previous periods and industry data.
- Compare gross profit percentage by product line with previous periods' and industry data.
- Compare actual cost of goods sold to budgeted amounts.
- Compare current-year standard costs with prior periods' after considering current conditions.
- Compare actual manufacturing overhead costs with budgeted or standard manufacturing overhead costs.
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