Section 03: Inventory South City is a construction company which builds houses, offices and hotels. Materials (cement, bricks, etc) are purchased from a large number of suppliers. As a member of the audit team, you are required to attend the inventory count of South City. On the day of the inventory count, you attended the warehouse premises of South City and observed the following activities: Pre-numbered count sheets were being issued to the client's staff carrying out the count. The count sheets showed the inventory ledger balances for checking against physical inventory. All count staff were warehouse staff and they were counting in teams of two. Information was recorded on the count sheets in pencil so amendments could be made easily as required. At the end of the count, all count sheets were collected and the numeric sequence of the sheets checked; the sheets were not signed. Required (i) In respect of your attendance at South City Co's inventory count, state one test of control and one substantive procedure that you should perform. (2 marks) (ii) List four audit procedures that an auditor will normally perform prior to attending the client's premises on the day of the inventory count. (4 marks) (iii) List two deficiencies in the control system for counting inventory at store and state how that deficiency can be overcome. (4 marks)