you are an Audit Senior on a client called Smell Good Ltd$,$ a public company that sells cosmetics with a year$-$end of $31$ July $2023.$

Smell Good Ltd has an inventory count scheduled for $4$ August $2023,$ and you are scheduled to attend the inventory count on this day. In preparation for the inventory count, you requested the Financial Manager, Ethan Swift, to provide you with the

inventory count instructions and a sample of the inventory sheets before the inventory

count commences for you to prepare for the attendance of the inventory count.

You received the following inventory count instructions from Ethan Swift in an email with an attachment of an inventory count sheet sample.

From: Ethan.Swift@smellgood.co$.$za

To: Auditor@mixmatch.co$.$za

Subject: Inventory count instructions and sample stock sheet

Date: $01$ August $202310$:$30$ AM

Good day Auditor,

I hope you are doing well. Please find the instructions provided to all employees

responsible for the inventory count; they must adhere to these instructions for a

successful inventory count.

Inventory count instructions pre$-$count $($from $01$ August to $03$ August$)$:

$1.$ No inventory to be sold or moved after $31$ July $2023$

$2.$ The last sale is to be made on $31$ July $2023,$ and if customers do not collect on

this day, the inventory will be held in a separate room within the warehouse away

from our inventory.

$3.$ Sales will commence from the $7$ August $2023$ with the necessary inventory

movement.

$4.$ All obsolete and damaged inventory is to be set aside from our saleable inventory

and customer stock that is still to be collected. $5.$ Each aisle must be prepared and packed neatly to display the product name and

code.

Inventory count instructions during count $(04$ August$)$:

$1.$ The inventory count sheets will be printed at $7$ a$.$m$.$ and provided to each staff

member responsible for an aisle.

$2.$ There will be $2$ staff members paired together per aisle. They will count together

and check the physical counts together.

$3.$ The inventory sheet will display the following: aisle number, the product name,

and the product code, with blank spaces for the inventory quantities to be filled

in after each product count.

$4.$ If there is no inventory of a particular product code, state $0$ on the inventory

sheet.

$5.$ At the end of each inventory sheet, both staff members will sign as an Formulate the test of controls that you would carry out during the inventory

count on $04$ August $2023$ for Smell Good Ltd$.$acknowledgement that the count done was accurate and complete.

Inventory count instructions post$-$count $($from $05$ August to $06$ August$)$:

$1.$ The completed signed inventory sheet will be given to the Inventory Clerk to

capture into the system.

$2.$ If any variances are identified, then another count is performed. If it was counted

incorrectly, the initial count will be crossed out, and a new amount will be added

and signed by the $3$rd person who counted. Thereafter, the necessary

adjustments are made.

$3.$ The Warehouse Supervisor reviews the final count input from the inventory

sheets to the inventory system, and all quantities are approved and finalised.

$4.$ After approval, the inventory system is updated with the actual stock quantities

counted, and a report is produced of the amendments.

On $07$ August, before trade commences, the stock levels reflect as at $31$ July $2023.$

Formulate the substantive audit procedures you would perform over the

inventory count for Smell Good Ltd$.,$ and after each substantive audit

procedure formulated, provide the applicable assertion.

$(30$ marks$)$