You are the audit senior in charge of the audit of House of Herbs Pte Ltd. a Chinese medicinal house.

The inventory records are tracked manually and also in the computer. There are more items tracked in the manually system as compared to the items tracked in the computer system. Each prescription to a customer would require a combination of a few kinds of herb. The dispenser would record on a manual stock card every time her issues a certain herb to the customer. The company does not use a standard form stock card. The stock cards used in the company varied. Some cards are preprinted while other cards were cutouts from carton boxes. a book-keeper would come in once a month to key the stock movement into the computer system.

The herbs in respective of value are kept in open shelves. Earlier in the year, tow kilogrammes of high value Cannadian Ginseng were found missing from the shelves. Your audit junior investigated the cases and found that there is no specific person in charge of receiving goods and recording of entries in the company. The herbs are sent by courier to the store. Any dispenser who was on duty could receive the package from the courier. The same person would record the receipt on the manual stock card.

Your audit junior noted that nobody reviews the stock cards to see whether any stock has expired. The management did one review of the inventory after a customer complained that he was given a can of expired medicated balm.

Q: Identify an internal control and a substantive audit procedure for each misstatement that you have identified from the case above.