PART B

One of the material items noted by Wallace Andrews for discussion and clarification with Benjamin Rogers was the major addition being made to the company warehouse, justified on the basis of the need for additional storage required for inventory to support expanding distributorship sales.

Describe and explain the audit steps (procedures) your engagement team took to be satisfied the warehouse addition was properly presented and disclosed (true & fair) on the financial report of Lakeside. (8 marks)

Your answer should be able to:

• describe the steps (procedures) your team undertook;
• identify the specific types of procedure and resulting types of evidence your steps illustrate;
• explain if those steps illustrated tests of controls, test of details of transactions, tests of details of balances;
• explain if each of Andrews concerns were resolved.