now a supervisor at a mid-size CPA firm.You are performing an audit of a private company who specializes in tower construction.One of the staff members on the audit comes to you and informs you during inventory testing; management stated they would not be able to allow us to physically count the inventory items.Additionally, we would need an employee of the client to identify the difference between the various inventory items.A normal CPA cannot identify the difference between the different tower pieces because they look the same but are valued differently.As such you must research how to follow GAAP and if you will still be able to audit the client or give them an unqualified opinion.

Discuss the standard when auditing inventory, whether you will be able to complete the audit and what facts need to be asked or examined. Additionally, review whether there is an issue with independence.