a) You are the manager of the audit of a large electrical goods retailer. The single largest asset of this retailer is inventory. Explain the purpose of substantive testing for inventory and describe the substantive procedures you will carry out at year end in order to obtain sufficient audit evidence regarding the assertions of valuation and existence and give examples of the main types of substantive tests. [13 marks]

b)Explain what is meant by statistical sampling and what is its purpose. [7 marks]