INVENTORY Definition

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INVENTORY for companies: includes raw materials, items available for sale or in the process of being made ready for sale (work in process) for securities: it is securities bought and held by a broker or dealer for resale. A firm that has a sustainable competitive advantage has an inventory and net earnings are rising on a corresponding basis. Inventories that spike up/down are indicative of competitive industries prone to boom/bust.

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PARALLEL SIMULATION TESTING is the simultaneous performance of multiple operations. It provides evidence of the validity of processing if the second processing system yields the same results as the first.  Auditors use their own generalized audit software to process the same data as was processed by the client’s software.  If the output of the audit software is the same as the output of the client’s software that is evidence that the client’s software is performing properly.

3-WAY MATCHING is the comparison of relevant voucher, purchase order, and receiver.

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