The client has inventory at approximately 50 locations in a three-province region. The inventory is difficult...

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Accounting

The client has inventory at approximately 50 locations in athree-province region. The inventory is difficult to count and canbe observed only by travelling by automobile. The internal controlsover acquisitions, cash disbursements, and perpetual records areconsidered effective. This is the fifth year that you have done theaudit, and audit results in past years have always been excellent.The client is in excellent financial condition.
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Recommend an evidence mix for the five types of tests for theaudit of inventory and cost of goods sold. Justify your answer.Include in your recommendations both tests of controls andsubstantive tests.

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Ans Review clients plan for performing inventory count Plan should included procedures relating to count and should allocate staff responsible for each of inventory at different locations Evidence of Appropriate supervision for those performing count should be examined See Answer

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