High-tech manufacturers are notorious for practicing "channel stuffing," whereby they ship to their distributors a great deal of merchandise shortly before the end of the accounting period, knowing full well that most of it will be returned-but not until after the beginning of the new accounting period. In the meantime, the manufacturer counts the shipments as sales. In fact, this practice has occurred, to one extent or another, in many industries. Regarding such practices, answer the following questions:

a. What management assertion(s) for what account(s) will be affected if the client engages in channel stuffing?

b. What elements of the control environment could alert the auditor that the client may be prone to engage in such activity?

c. What tests of controls will give the auditor some assurance that the client has not engaged in channel stuffing?

d. What substantive audit procedures might help uncover the practice?