Abbott Corporation does not conduct a complete annual physical count of purchased parts and supplies in its principal warehouse but instead uses statistical sampling to estimate the year-end inventory. Abbott main- tains a perpetual inventory record of parts and supplies and believes that statistical sampling is highly effective in determining inventory values and is sufficiently reliable to make a physical count of each item of inventory unnecessary. Required:

a. Identify the audit procedures that should be used by the independent auditor that change, or are in addition to, normal required audit pro- cedures when a client utilizes statistical sampling to determine inven- tory value and does not conduct a 100 percent annual physical count of inventory items.

b. List at least 10 normal audit procedures that should be performed to verify physical quantities whenever a client conducts a periodic physi- cal count of all, or part, of its inventory. (AICPA, adapted) P-963