You are auditing the financial statements of a cosmetics distributor that sells thousands of individual items. The distributor keeps its inventory in its distribution center and in two public warehouses. At the end of each business day, it updates its inventory file, whose records contain the following data:
Item number
Cost per item
Item description
Quantity sold during year.
What auditing procedures should you perform to ensure accuracy? Is there an audit software package that can be used?
Sample Solution
