2. Based on all of the information that has been gathered on GGI (including that in Assignment 1), the partner has identified a number of areas requiring further investigation. See the table below for details. For each of these areas, discuss how the issue presents a risk of a material misstatement at the assertion level and what assertion is affected, and design a substantive audit procedure to address the identified risk. Be specific; marks will not be awarded for generic audit procedures. Include what assertion(s) is being tested. Use a chart like the one

\fIssue What is the risk of a material misstatement? Account and assertion impacted Substantive audit procedure to address risk As a grocery store, GGI sells many perishable products that are only saleable before their expiry dates or while product is still safe to _ consume. GGI sells health supplements with a short shelf life (two to six months). GGI has not recorded the 10% purchase rebates on beef for the year. Issue Inventory is not being counted as it is being received. What is the risk of a material misstatement? Example: Inventory may not be recorded, and there may not be purchases accrued; therefore, inventory and the related payable may be understated. Account and assertion impacted Example: Inventory and NP completeness and existence Substantive audit procedure to address risk Example: Perform test counts of inventory and compare them to the inventory subledger to ensure that inventory on hand is reected in the subledger. Select invoices received both immediately before and immediately after year end from suppliers and trace them to the accounts payable subledger to ensure that all payables are captured in the appropriate period