You are a involved in your CPA firms first audit of Zorostria, a retailer of artwork, primarily paintings and photographs purchased from artists in Southeast Asia (particularly Vietnam, Cambodia, and Laos). Zorostria has stores in 7 cities throughout the US, Mexico, and Canada.

Discuss difficulties you should anticipate in planning the observation of physical inventory on this engagement because of:

The different location of stores

The nature of the artwork

Assume that Zorostrias records indicate that it shipped goods on December 31 for a very major sale to a customer in Edmonton, Alberta, Canada.

Since it was shipped as of December 31, does this represent a sale for the year ended on that date?

What additional audit steps could be taken to determine that the sale is valid?