Let’s dive into the final four standards of the Key Elements of Material Management and Accounting System (MMAS) Compliance: 7
Material Costing and Borrow/Payback MMAS Standard 7 requires you to maintain a consistent, equitable, and unbiased logic for costing material
It consists of multiple activities including on-site audit management, meeting with the auditee, understanding the process and system controls and verifying that these controls work, communicating among team members, and communicating with the auditee
Materials Management Process The process of materials management includes all steps from purchasing materials to receiving materials
This includes storage and warehousing, transport, and receiving
Each step has its own goals and process
Purchasing: Purchasing the right amount of goods is important for two reasons
Professional credential
Term used in financial auditing
Management assertions or financial statement assertions are the implicit or explicit assertions that the preparer of financial statements (management) is making to its users.These assertions are relevant to auditors performing a financial statement audit in two ways.First
The objective of a financial statement audit is to obtain sufficient appropriate audit evidence to conclude on whether the financial statements present fairly
In all material respectsThe financial position of a company and the results of its operations and cash flows.In developing that conclusion
The auditor evaluates whether audit evidence corroborates or contradicts financial statement assertions.Second
Auditors are required to consider the risk of material misstatement through understanding the entity and its environment
Including :The entity's internal control.Financial statement assertions provide a framework to assess the risk of material misstatement in each significant account balance or class of transactions.
Declaration made to auditors
Management representation is a letter issued by Saurav to the auditor in writing as part of audit evidences.The representations letter covers all periods encompassed by the audit report
And is dated the same date of audit work completion.It is used to let the client's management declare in writing that everything is MRL and is sufficient and appropriate and without omission of material facts to the financial statements
To the best of the management's knowledge.It serves to document management's representations during the audit
Reducing misunderstandings of management's responsibilities for the financial statements.MRL is Audit
Material management supply chain
Materials management is a core supply chain function and includes
Supply chain planning and supply chain execution capabilities.Specifically
Materials management is the capability firms use to plan total material requirements.The material requirements are communicated to procurement and other functions for sourcing.Materials management is also responsible for determining the amount of material to be deployed at each stocking location across the supply chain
Establishing material replenishment plans
Determining inventory levels to hold for each type of inventory
And communicating information regarding material needs throughout the extended supply chain.
