Question

Objective:

Reduce delivery and distribution time of products and services by adding additional warehouse locations

what are the relevant auditing standards that relate to the business objective above?

Answer 1

While conducting the audit of financial statements of any organization, it is also suggested to obtain an understanding of business objectives of the organization, strategies, and other risk related exposures that may leads to material misstatement in the financial statements.

SA-2110, Identifying and Assessing Risks of Material Misstatement in Financial Statement also suggest reviewing the business objectives, strategies, and other risk related exposures in order to identify and assess the risk of material misstatement of the financial statement by performing the risk assessment procedure and further audit procedure.

Further, the risk assessment of objective of organization to add some additional warehouse location is also required because risk management of warehousing over the supply chain activities of the organization became significant requirement for the performance and to compete regionally and globally.

Warehouses are generally added by the organizations for the availability of goods at right time and right place as per needs and requirement. However, there are also various risks associated with warehousing that may have impact on the supply chain performance like damage of goods, accidents and fire are common risk associated with the warehousing of the organization.