You are a manager in the team of a ‘Big 4’ audit firm that is auditing Boomerang, a retail clothing chain with stores in major shopping malls throughout Australia and New Zealand. You have been assigned the responsibility for confirmation of the client’s valuation of the inventory held at its distribution centre.

The client has had stock count sheets prepared in duplicate with the first four fields above filled in and a blank space for quantity on hand to be written in. Client staff are about to count the inventory and complete the stock sheets. The second copies were given to you.
Required How do you plan to go about substantiating the client’s inventory valuation, assuming that you have a comprehensive generalised accounting software package available?

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The structure of the client's inventory master file is: Item number Description Size Colour Quantity on hand Weighted average cost Last cost Vendor code Economic order quantity Reorder point Quantity issued for year Quantity purchased for year