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While completing the external audit of Greenfield Inc., a distributor of luxury pools and hot-tubs in the southeastern United States, the external auditors, Coopers
While completing the external audit of Greenfield Inc., a distributor of luxury pools and hot-tubs in the southeastern United States, the external auditors, Coopers Auditing LLC, are determining the most appropriate course of action to effectively audit the inventory account for the client and check any associated assertions. Various suggestions have been put forth by the staff assigned to the audit with respect to how they feel this could be best handled. The most likely and prudent course of action for Coopers' staff would be O to request that the internal audit function handle this area of the audit, as staff working in the internal audit function are more likely to be familiar with whether or not the inventory is accurately and appropriately valued. to focus the audit time and allotted hours on auditing the cutoff and disclosure assertions for the inventory accounts to ensure that balances are fairly and accurately presented. If so, the auditors will be in a position to issue a clean audit opinion on the financial statements. to request written assurances from top management which can be added to the current years' audit file, confirming that inventory classifications and account balances are correct. If such assurances can be obtained, the auditors will be able to decrease the cost of the audit. O to spend the audit hours assigned to this area of the audit focusing on the existence and valuation assertions, to ensure that the inventory exists and is appropriately valued. If this is not the case, the auditors can disclaim an opinion on the financial statements.
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