As part of a loan agreement that it is thinking of obtaining, Always Quick Manufacturing Limited has decided that it will use accounts receivable and inventory as security for working capital funds. The bank has indicated that in addition to an annual financial statement audit, it would require quarterly assurance on the accounts receivable and inventory amounts. The type of assurance required has not been stated. The bank has told Jose, the owner of the company, that he would need to provide a detailed inventory list and an aged accounts receivable trial balance on the fifteenth of each month for the information as at the preceding month end. Jose would like to know what his alternatives are.

Required:

Recommend to Joe two (2) alternative types of engagements that could be used to provide assurance on the accounts receivable and inventory balances. (1 mark for each engagement).Describe each of your recommended engagement report. (1 mark for each engagement report)