Rosa Alzeido is doing an inventory count for CCPC Hockey, a well-known maker of hockey sticks. She is to count both the finished goods as well as the raw materials. CCPC has a June 30 year end and shuts down production the week before year-end so that no work remains in process at year-end. All of the wood comes from Canadian suppliers while the aluminum and carbon composites are imported from Korea and China respectively.

Rosa notes that the factory is clean and the inventory well-laid out. She selects several items from the inventory records to count and also picks items from the floor to trace to the inventary

records. The wood is stored in stacks. Although it varies in width and length, Rosa gets a measuring tape and estimates the number of board feet in each stack. Aluminum is preformed in the shap

iddle of the warehouse in large bundles that makes it easy to measure. The composite material is a combination of carbom fiber mats in

of a stick and is referred to as hollow rod. It sits n the

large rolls as well as chemicals stored in large containers. The chemicals are a bit toxic and a respirator needs to be worn if the container is open.

Finished goods are prepackaged for shipment in large, brown, cardboard boxes. The boxes are stored on large racks. Although the boxes look the same, each box is clearly labelled and all similar finished goods are stored on the same, or on an adjoining shelf. Each box holds a dozen finished sticks, so Rosa counts the boxes and multiplies by twelve to get the final counts.

Required

a) (4 marks) Identify some assertions that are at increased risk of a material misstatement.

b) (4 marks) In audit terms, identify the type of evidence obtained and whether you feel it is sufficient to support the inventory amount stated on the balance sheet.