To test the existence of inventory (i.e., "sheet to floor"), enter the quantities from the Inventory Status Report downloaded from the website for the items indicated on Work Paper 5-2. Some inventory items selected for review have already been completed. Please note that the order of the Inventory Status Report and Inventory Count Tag columns is the reverse of Work Paper 5-1 to reflect the change in the order of observation (i.e., switching from "floor to sheet" to "sheet to floor"). Then locate the Inventory Tag in the PDF files downloaded from the website to confirm the existence and accuracy of the inventory item. In an actual inventory observation, the auditor would make selections from the Inventory Status Report and the client would take the auditor to the actual inventory item and the attached count tag. For this exercise, you will vouch the selections from the Inventory Status Report (i.e., the "sheet") to the tag provided in the file above (i.e., the "floor"). Compare the quantity from the Inventory Status Report with the quantity on the tag. For inventory items where the counts differ, briefly describe which management assertion(s) appear to be violated. (Leave no cells blank - be certain to enter "0" wherever required.)

Description of the inventory count process:

EarthWears Procedures: During EarthWear's year-end inventory count in each warehouse, representatives of the company count all inventory items and record the count for each inventory item on an inventory "count tag." Once the count at a particular warehouse is finished, all tags are collected and compared with the Inventory Status Report. Corrections are recorded on the Inventory Status Report and entered into the Inventory program.

Auditors Procedures: Inventory observation is a required procedure under Generally Accepted Auditing Standards. In addition to inquiry regarding the clients count controls and procedures and observing the clients overall inventory count process and the organization of the warehouse, the external auditor performs test counts on a sample of inventory items. Some of the selections are made from count tags, which are then traced to the inventory status report to verify that the inventory status report is complete and accurate. This procedure is often referred to as a floor to sheet test (i.e., all inventory items on the warehouse floor have been included in the inventory status report sheet), and is primarily a test for the completeness and accuracy assertions.

The auditor also makes some test count selections from the inventory status report and vouches the selected inventory items to the corresponding inventory count tags to verify that inventory listed on the inventory status report exists and is accurate. This procedure is often referred to as a sheet to floor test (i.e., all inventory items included on the inventory status report sheet represent items that actually exist on the warehouse floor),

GERMANY
Inventory ID	Description	Quantity on Inventory Count Tags	Quantity on Inventory Status Report	Difference	Describe any Violations of Management's Assertions
101-2089	Medium T-shirt	32,789	32,789	0
102-5573	M Sweater	Enter Qty. Here	Enter Qty. Here	Enter Tag Count
102-8637	XL Sweater	94,202	94,202	0
103-2538	Photo 5 X 7	23,842	23,842	0
103-7994	Photo 11 X 17	Enter Qty. Here	Enter Qty. Here	Enter Tag Count
104-9326	Duffel Bag	7,560	7,560	0
JAPAN
Inventory ID	Description	Quantity on Inventory Count Tags	Quantity on Inventory Status Report	Difference	Describe any Violations of Management's Assertions
101-2089	Medium T-shirt	23,324	23,324	0
102-5573	M Sweater	Enter Qty. Here	Enter Qty. Here	Enter Tag Count
102-8637	XL Sweater	19,805	19,805	0
103-2538	Photo 5 X 7	23,901	23,901	0
103-7994	Photo 11 X 17	Enter Qty. Here	Enter Qty. Here	Enter Tag Count
104-9326	Duffel Bag	18,345	18,345	0

Inventory Status Report International Warehouses Date: 11/2020 Inventory No. 100-2545 101-1348 101-2089 101-3573 102-5573 102-8637 103-2538 103-5037 103-7994 104-3501 104-4510 104-9326 Item Description Fishing Vest Small T-shirt Medium T-shirt Large T-shirt M Sweater XL Sweater Photo 5 X7 Photo 8 1/2 X11 Photo 11 X17 Briefcase Large suitcase Duffel Bag Germany Japan Total 11,894 8,349 32,789 28,239 84,383 94,202 23,842 53,838 9,498 8,645 23,324 2,342 9,678 19,805 23,901 8,907 18,234 43,487 24,389 18,345 21,392 16,994 56,113 30,581 94,061 114,007 47,743 62,745 18,234 128,387 43,396 25,905 84,900 19,007 7,560