You are currently part of the team who is conducting the audit of origin secure company ltd for the year ended 30 June 2020.

Origin secure is a manufacturer of security doors and security alarm systems. Your audit manager has asked you to carry out audit checks on cut off at year end. Origin maintains details of stock quantities on its computer system. These stock quantities are updated from the goods received notes and sales invoices.

Origin conducts a wall to wall count of inventory. whereby all operations cease and they count all inventory in a single stocktake. You have noted that the following risks of potential miss talent: 7

I. Due to poor labelling procedures, some empty containers may be included in the inventory count.

II. Obsolete and damaged security alarm components may have been overlooked in the warehouse.

III. The lower of cost or net realisable value method may have been incorrectly applied.

There are no relevant control activities that could prevent these potential misstatements from occurring.

Required:

A. For each of the potential misstatements listed above, indicate the financial report assertion to which it relates.

B. Describe one substantive test of detail that will substantive each of the assertions listed in A