You are to assume that you are working in the team charged with the audit of Hardco Limited (Hardco) for the year ended 31 March 2018 and will be working on inventory. Hardco purchases a wide variety of hardware products directly from the manufacturer and then on sells these to retail hardware stores across New South Wales. Inventory is stored in a single warehouse. Total sales revenue for the year is expected to be approximately $1,000,000. Planning materiality has been set at $50,000 and performance materiality for inventory is $30,000. You have been advised by company management that the sales price for all products has remained unchanged for the entire year. The company uses a period inventory system. The risk of material misstatement for the assertions of "Existence' and 'Accuracy Valuation and Allocation' is high. The partner has decided to adopt a primarily substantive approach to the audit of inventory. You have downloaded some data from the client's information system and saved it as an excel file (this is available on the Course Moodle website - you should download this file before class). The data includes the following: Column Heading Prod No. Prod Name Avg Cost Sales Price POTY Balance Sales LPDate LSDate Inventory COS Sales Description Product Number Product Name Average cost per unit Sales Price Quantity of last purchase Quantity available for sale as at 31 March Quantity of product sold during the year Date of last purchase None of this information has been audited. Remember also that control risk has been set at high and no reliance is being placed on controls. Date of last sale Cost of inventory at year end Cost of Sales for the year Sales revenue for the year In class, you will be using Excel (or other spreadsheet packages) as an audit tool to assist in the execution of the audit plan and to perform substantive tests relating to the audit of inventory. Before class, you must make sure that you are able to perform the basic excel functions of sorting data, using formulas to perform basic mathematical functions, and generating random numbers. There are many online tutorials that can help you have forgotten how to perform these l asic functions.. You should specifically consider the following questions and submit your preparation notes; . Reflect on how a contemporary IT environment impacts the conduct of an audit. In this regard, describe key elements that an auditor needs to consider in relation to: - understanding the entity/ assessing inherent risk, understanding and assessing internal controls, performing controls testing and performing substantive testing. Detail one (1) audit procedure that you will perform in order to collect sufficient appropriate audit evidence for both the 'existence' and 'accuracy, valuation and allocation of inventory. For each of the procedures, note ways in which the auditor could use excel functions and the data file discussed above to help perform the procedure. Remember that, in order to be eligible for the 2 marks seminar preparation, you must submit your preparation notes via the Turnitin link in Moodle.