Question 3 (15 marks) Your audit firm is the auditor of Speighstown Garden Centre, which operates a large centre that sells plants, garden furniture (e.g. outdoor benches) and garden equipment (e.g. lawn mowers). The inventory system is up-to-date; the records are well maintained and the year end quantities are used to determine the inventory value. The inventory count instructions are shown below: (1) The inventory count will supervised by the Financial Controller and will take place on 31 August 2012. The count will begin at 7am. The centre will be closed on the day of the count, but if any of the large customers like hotels require a rush order, they will be accommodated. One member of the Accounts Department will be assigned to each area along with a member of the garden staff. There will be computer produced sheets showing the quantities of each item from the system. The Financial Controller will distribute and collect back the forms at the end of the count. Where the amount observed is different to the amount on the sheet, it will be crossed out and the new amount written in pencil. (111) The Financial Controller will then carry out test counts on five items in each area that has been counted. Where an error is found, the area will be re-counted. (iv) The quantity for any inventory that looks damaged or unsaleable should be crossed out and allotted a quantity of zero. Once all the sheets have been collected and test counts completed, the Financial Controller will manually update the computerised system to reflect the counted quantities. After the system has been updated, the count sheets are discarded. Required: Identify and explain FIVE deficiencies in the inventory counting system that can be highlighted in the instructions from Speighstown Garden Centre. For each deficiency suggest how it could be overcome. (15 marks)