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Robert is the partner-in-charge of the audit of Bonner Distributing Corporation, a wholesaler that owns one warehouse containing 80% of its inventory. Robert is reviewing the working papers that were prepared to support the firm’s opinion on Bonner’s financial statements, and Robert wants to be certain that essential audit tests are well documented.
a. What evidence should Robert find in the working papers to support the fact that the audit was adequately planned and the assistants were properly supervised?
b. What substantive tests should Robert expect to find in the working papers to document management’s assertion about completeness as it relates to the inventory quantities at the end of the year?
What type of analysis could you use to determine if there is a benefit of combining activity based management and JIT manufacturing?
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