Controls for the inventory cycle of ABC Ltd are recorded below. For each control complete the following:

(a) Discuss how the control would be tested including the key management assertion to be considered and expected control deviation(s).

(b) Discuss the evidence to be collected from the testing of each control.

Internal Controls -Inventory

1 Inventory items added to the inventory warehouse are linked to a receiving report and purchase order

2 Inventory totals are checked to an inventory stocktake once every 6 months

3. Inventory items dispatched from the inventory warehouse are accompanied by a despatch note and related sales invoice

4. All inventory additions and dispatches are recorded in the perpetual inventory system each day.

5.The accountant reconciles the inventory balance monthly to monthly purchases and sales data

Question: Discuss how the control would be tested including the key management assertion to be considered and expected control deviation(s). and the evidence of 5 inventory internal controls above