Search the auditing standards to determine the requirements

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Question - Spring & Jones, CPA, LLP, is currently auditing Worldwide Electronics Inc. that manufactures electronic equipment utilized around the world.  The audit client purchases in bulk large quantities of various inventories of stock material to produce various specialized parts used in electronic equipment.  The client claims that there might be some obsolete stock on hand from these bulk purchases, but states that to determine the complete degree of obsolescence is difficult due to the highly specialized nature of the product line which may not lead to renewed orders until future period.

Spring & Jones decided to first search the auditing standards to determine its responsibility, not being inventory experts, as to the extent of obsolescence.  If the auditors conclude they do have a responsibility they determined to utilize data analytics software to investigate the extent of obsolete inventory.

Required -

a. Search the auditing standards to determine the requirements, if any, for Springer & Jones to evaluate the extent of obsolescence.

b. Based upon your conclusions from the auditing standards, indicate ways to utilize data analytics software in an attempt to evaluate the extent of obsolete inventory.

Reference no: EM133187623

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