21-20 The following misstatements are included in the inventory and related records of Westbox Manufacturing Company:

1. When raw material acquisitions were recorded, the improper unit price was included in the perpetual inventory master file. Therefore, the inventory valuation was misstated because the physical inventory was priced by referring to the perpetual records.

2. In taking the physical inventory, the last shipments for the day were excluded from inventory and were not included as a sale until the subsequent year.

3. The clerk in charge of the perpetual inventory master file altered the quantity on an inventory tag to cover up the shortage of inventory caused by its theft during the year.

4. After the auditor left the premises, several inventory tags were lost and were not included in the final inventory summary.

5. During the physical count, several obsolete inventory items were included.

6. Because of a significant increase in volume during the current year and excellent control over manufacturing overhead costs, the manufacturing overhead rate applied to inventory was far greater than actual cost.

7. An inventory item was priced at $12 each instead of at the correct cost of $12 per dozen.

Required

a. For each misstatement, state an internal control that should have prevented it from occurring.

b. For each misstatement, state a substantive audit procedure that can be used to uncover it.