Sun and Solar & Co

You are planning the first audit of Sun and Solar & Co for the year ended 31^st December 2020. The main activity of the company is the manufacture of sun loungers and umbrellas, which are supplied to both retail and wholesale companies. The company holds much of its stock on site, however due to space restrictions the company has arranged to store a large quantity of stock at the nearby site of a supplier.

Required:

1. Identify the main risk areas that may exist when auditing the yearend inventory of Sun and Solar & Co.
2. Describe the substantive procedures that the auditor may perform on the yearend inventory figure of Sun and Solar & Co.
3. Describe the principal procedures involved in planning the attendance of the companys physical inventory count.