Question 1:

a- What are the directors responsibilities for stocktaking?

b- What categories of stock are there?

c- List the characteristics of good stocktaking procedures.

d- What are the auditors duties towards stocktaking:

Before the stock take

During the stock take

After the stock take?

e- What are the auditors tasks in connection with work in progress?

f- What overall tests can be applied in respect of stock?

g- Summaries of the accounting standards for the valuation of:

Stock

Work in progress

Long term contracts

Question two: You are the auditor of Wholesalers Ltd., a shoe wholesaling company, whose next year end will be 30^th September 1981. The company intends to determine the quantity and value of each line of stock at a physical stock check to be held on Saturday and SUNDAY, 26^TH AND 27^TH September 1981, and then adjust for movements between 27^th and 30^th September. The purchases and sales ledgers will be closed on 30^th September. The company has a fast-moving stock but operates a satisfactory recording system which incorporates goods inwards and dispatch records. You are required to describe the audit procedures that you would adopt to satisfy yourself that the companys cut-off disciplines are adequate.