A CPA's client, Boos & Baumkirchner, Inc., is a medium-size manufacturer of products for the leisure-time activities market (camping equipment, scuba gear, bows and arrows, and so forth). During the past year, a computer system was installed, and inventory records of finished goods and parts were converted to computer processing. The inventory master file is maintained on a disk. Each record of the file contains the following information:

• Item or part number

• Description

• Location

• Size

• Unit-of-measure code

• Quantity on hand

• Cost per unit

• Total value of inventory on hand at cost

• Date of last sale or use

• Quantity used or sold this year

• Economic order quantity

• Code number of major vendor

• Code number of secondary vendor

In preparation for year-end inventory, the client has two identical sets of preprinted inventory count cards. One set is for the client's inventory counts and the other is for the auditor to use in making audit test counts. The following information has been keyed into the client's system:

• Item or part number

• Description

• Location

• Size

• Unit-of-measure code

When all counts are complete, the counted quantity will be entered into the system. The data will be processed against the disk file and quantity-on-hand figures will be adjusted to reflect the actual count. A computer list will be prepared to show any missing inventory count cards and all quantity adjustments of more than $100 in value. Client personnel will investigate these items and all required adjustments will be made. When adjustments have been completed, the final year-end balances will be computed and posted to the general ledger.

The CPA has generalized audit software available that will run on the client's computer and can process the inventory disk files.

Required

a. In general and without regard to the facts in this case, discuss the nature of GAS and list the various types and uses.

b. List and describe at least five ways GAS can be used to assist in the audit of the inventory of Boos & Baumkirchner, Inc. (For example, the software can be used to read the disk inventory master file and list items and parts with a high unit cost or total value. Such items can be included in the test counts to increase the dollar coverage of the audit verification.)