Reference no: EM132628063

Question - World Class Works Ltd. (WCW)is a retailer of fine art and is publicly traded. The artis high quality, and WCW caters to a wealthy segment of the population. WCW has three retail locations throughout the city along with a central warehouse facility. Kili Tao is a junior auditor with the firm of Watersons LLP, and she has been assigned the inventory section of the audit file. Kili has completed her review of the internal controls over inventory and is satisfied that they are operating as intended and has assigned a moderate risk of internal control failure. Kili is now beginning to do the substantive evidence gathering for the completion of the audit.

Kili 's audit senior wants to make sure Kili understands what is expected in the substantive audit programs and has asked Kili to provide the following information:

a) Identify and explain three of the principal audit assertions with respect to the audit of inventory.

b) For each of the assertions identified above, design one substantive audit test that would provide appropriate evidence for that assertion for GGI.

c) For the audit of WCW's inventory, explain which assertion is the most important one.