Identify and explain three key audit assertions

Reference no: EM132972677

Question: Gorgeous Gems Inc. (GGI) is a retailer of fine jewelry and is publicly traded. The jewelry is very high quality and GGI caters to a very wealthy segment of the population. GGI has three retail locations throughout the city along with a central warehouse facility.

Cam Blessy is a junior auditor with the firm JKLM CPAs and has been assigned the inventory section of the audit file. Cam has completed his review of the internal controls over inventory and is satisfied that they are operating as intended and have assigned a moderate risk of internal control failure. Cam is now beginning to do the substantive evidence gathering for the completion of the audit. Cam's audit senior wants to make sure Cam understands what is expected in the substantive audit programs and has asked Cam to provide the following information:

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

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

c) For the audit of GGI's inventory, identify which assertion is the most important one and explain why.

Reference no: EM132972677

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