The auditor has always received good cooperation from a particular client and has no reason to question management’s integrity. The controller has requested that the auditor inform her about which warehouse locations that the auditor will visit during the upcoming inventory count. In addition, the controller has requested copies of the auditor’s observations on the physical inventory because she wants to make sure that a good inventory was taken.
A. Should the auditor comply with these requests?
B. State your rationale, including a discussion of professional skepticism.
Topic 2
A. Identify preliminary analytical procedures related to depreciation expenses that may be effective in identifying potential material misstatements.
B. What ratios and expected relationships might be used when performing preliminary analytical procedures related to long-lived assets?
C. Do you think that there is often fraud in these areas?
