Identify two audit procedures

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Question: Peaches Limited is a company that has many branches and divisions around Australia with the main or general administrative office in Melbourne. You are part of the auditing team that is presently auditing the general purpose financial statements of the company for the year ended 31 December 2015.

Leo, the senior audit manager has assigned you to the audit of the inventory and accounts receivable balances as at 31 December 2015. The working papers that he gives to you have a conclusion which states that:

"Internal controls of Peaches Limited should not be relied upon due to the many weaknesses discovered by us. The existence of both inventory and accounts receivable is at risk".

REQUIRED:

A) Identify two audit procedures each that you could use to test the existence assertion for inventory and for accounts receivable; (that is two procedures for each account).

B) How would your answer change, if at all, if it was established that the internal controls were operating effectively?

Reference no: EM131572135

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