Auditor deal with inventory count issues

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Reference no: EM133209430

On December 31, 2021, Global Cement Inc., a cement wholesaler, conducted its annual year-end inventory count. Global Cement stores all of its cement in large storage silos (very tall cylinder-shaped metal bins).

Global Cement's staff member Matthew French was assigned to help with the year-end cement inventory count. The weight of the cement (in kilograms) is estimated using a mathematical formula and the dimensions of the silo and the space taken up by cement inside the silo.

To figure out the space taken up by cement inside the silos, Matthew was supposed to climb on top of each silo and use a long measuring stick to find out the depth of cement inside each silo. Since it was cold and windy, Matthew didn't feel like climbing on top of the silos.

He simply guessed the depth of cement and gave his numbers to the company's controller, who used them and the mathematical formula to derive the weight of cement inventory on hand at year-end.

Required:

How should an auditor deal with the inventory count issues discussed above?

Reference no: EM133209430

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