Question 2 Your audit client Greenleaf Ltd will be conducting their inventory count for the year ended 30 June 2021. You have been provided with the following inventory count instructions by your client: i. Mr Peter Rose, Assistant Chief Accountant has overall responsibility for the inventory count but he is to be assisted by Ms Jean Charles, the warehouse manager, to whom the inventory count teams are to report and who will be responsible for the detailed organisation of the count. ii. Five count teams are to carry out the actual count, each team to be responsible for a predetermined section of the warchouse. Each team comprises two persons, one from the accounting department and the other from the warehouse. iii. Each count team is to meet Ms Charles at 7 am on 30 June 2021 and will be provided with pre-numbered and pre-printed inventory sheets for the section of the warehouse for which they are responsible. These inventory sheets have been prepared by the inventory control department and show the balance of each inventory item on hand as shown on the inventory records held independently of the warehouse. iv. During the count both members of the count team are to count the inventories independently of each other. In the event of differences arising between inventories counted and the quantities shown on the inventory sheets, the quantity counted is to be entered alongside the original quantity and must be initialled by the senior member of the count team. v. Each inventory count sheet is to be signed by the senior member of the count team and the bin or rack tags held in the warehouse are to be adjusted, if necessary, to actual quantities counted. All tags are to be initialled to show that the count has been made. vi. Any goods that appear to be in poor condition are to be deducted from the quantity appearing on the inventory sheets, such action again to be supported by initial of the senior member of the count team. vii. Any queries during the count are to be referred to Ms Charles to whom inventory sheets are to be returned at the conclusion of the count. Ms Charles is responsible for ensuring that all inventory count sheets have been returned and for forwarding them to Mr Rose for valuation. Required a) Identify FIVE matters that you believe management should address if the inventory count is to be effective. ( 5 marks) b) Explain how each of the matters identified could be rectified. ( 5 marks) c) State and explain TWO tests to determine whether net realisable value is lower than costs. (2 marks)