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POWERFAST During the final audit of Powerfast, the following points arose in the audit manager's review of the audit of inventories for the year ending 31 May 20X1.
(a) No audit work had been conducted in order to ascertain whether any inventory items should be written down to net realisable value.
(b) The client utilises large quantities of coal in order to produce their output. The coal is stored in large piles and is transported to the factory units by means of a conveyor system. Perpetual inventory records are maintained showing the amount of coal on hand, and receipts and withdrawals of coal. No audit work has been carried out in this area, the perpetual inventory records having been accepted for financial statement purposes.
Required:
Describe the audit procedures which would be carried out at this late stage of the audit in order to satisfy the audit manager's review points and ensure that inventories are accurately stated in the financial statements.
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