14-21 5 6 For each audit procedure commonly performed in the inventory and distribu- tion cycle for a manufacturing company, identify whether each of the procedures is primarily a test of controls or a substantive test. Test of Controls/Substantive Test Procedure Read the client's physical inventory instructions and observe whether they are being followed by those responsible for counting the inventory Account for a sequence of inventory tags and trace each tag to the physical inventory to make sure it actually exists. Compare the client's count of physical inventory at an interim date with the perpetual inventory master file. Trace the auditor's test counts recorded in the audit files to the final inventory compilation and compare the tag number, description, and quantity. Compare the unit price on the final inventory summary with vendors' invoices. Account for a sequence of raw material requisitions and examine each requisition for an authorized approval. Trace the recorded additions on the finished goods perpetual inventory master file to the records for completed production