Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ACE Corporation does not conduct a complete annual physical count of purchased parts and supplies in its principal warehouse but uses statistical sampling to estimate
ACE Corporation does not conduct a complete annual physical count of purchased parts and supplies in its principal warehouse but uses statistical sampling to estimate the year-end inventory. ACE maintains a perpetual inventory record of parts and supplies. Management believes that statistical sampling is highly effective in determining inventory values and is sufficiently reliable, making a physical count of each item of inventory unnecessary.
- List at least 10 normal audit procedures that should be performed to verify physical quantities whenever a client conducts a periodic physical count of all or part of its inventory. (See Appendix Exhibit 9B.1 for procedures.)
- Identify the audit procedures you should use that change or are in addition to normal required audit procedures [in addition to those listed in your solution to part (a)] when a client utilizes statistical sampling to determine inventory value and does not conduct a 100 percent annual physical count of inventory items.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started