Consider the following two independent situations:

a. Company Alpha supplies women's clothes from its seven regional warehouses to small retail stores in shopping malls and roadside mini-malls throughout the country. By employing a sophisticated bar-coding scheme, Company Alpha tracks each article of clothing from the moment it is received at the receiving department to the time it is placed on board the trucks that leave its warehouses early each morning. The inventory tracking mechanism was instituted primarily to provide sales and marketing managers with nearly real-time data on what products are moving and which are not, and when stocks require reordering. However, the system interfaces with the accounting system to provide the controller with information on inventory levels for financial statement preparation purposes.

b. Company Beta is a large retail women's clothing store located in a regional shopping mall. Their inventory tracking scheme consists primarily of a documentbased system of purchase orders, receiving reports, and sales receipts. A periodic physical inventory is taken each year by the store personnel.

For each of these two companies, discuss a general strategy for testing management assertions for the inventory account.