You are the audit senior of Bo and Partners and are planning the audit of GreenTabs and Co for the year ended 30 December 20X0. The company produces laptops and tablets and has been a client of your firm for four years. You have begun planning for the audit and found out the following information.In 20X0 they implemented a number of initiatives to try to improve results. This included introducing a generous salesrelated bonus scheme for their salesmen, a high profile advertising campaign and extending the credit period offered to customers. Additional overheads havebeen included in inventory this year as they are considered to be production related.

From the 1stJanuary 20X1 GreenTabs Co will introduce a new inventory system, explain THREE audit tests that should be performed in order to ensure the auditors understand the system and that it is working effectively.