Auditing accountant

A CPA's client, Boss & Baumkirchemer, Inc is a medium-size manufacturer or products for the leisure-time activities market (cramping equipment scuba gear, bows and arrows, and so forth. During the past year, a computer system was installed and inventory records of finished goods and parts were converted to computer processing. The inventory master file is maintained on a disk. Each record of the file contains the following information.

Items or part number total value of inventory on hand at cost

Description Date of last sale or usage

Size Quantity used or sold this year

unit-of measure code Economic order quanity

Quantity on hand Code number of major vendor

cost per unit code number of secondary vendor

In preparation for year-end inventory, the client has two identical sets of p reprinted inventory count cards. One set is for the clients's inventory counts, and the other is for the CPA's use to make audit test counts. The following information is on each card:

Item or part number Size

Description Unit-of-measure code

In taking the year- end inventory, the clients personnel will write the actual counted quantity on the face of each card. When all counts are complete, the counted quality will be entered into the system. The cards will be processed against the inventory database, and quantity-on-hand figures will be adjusted to reflect the actual; count. A computer generated edit listing will be prepared to show any missing inventory count cards and all quantity adjustment of more than $100 in value. These items will be investigated by client personnel, and all required adjustments will be made. When adjustments have been completed, the final year-end balances will be computed and posted to the general ledger. The CPA has available generalized audit software that will run on the clients's computer and can process both card and disk files.

A. In general and without regard to the facts in this case, discuss the nature of generalized audit software and list the various types and uses.

b. List and describe at least five ways generalized audit software can be used top assist in all aspects of the audit of the inventory of Boos & Baumkirchner, Inc. (for example the software can be used to read the disk inventory master file and list items and parts with high unit cost or total value. Such items can be included in the test counts to increase the dollar coverage of the audit verification