Juventus Motor Cars Co (Juventus) manufactures a range of motor cars and its year end is 30 June 2019. You are the assistant audit manager of Milan & Co and are currently preparing the audit programmes for the year-end audit of Juventus. You have had a meeting with your audit manager and he has notified you of the following issues identified during the audit risk assessment process: 1. Inventory - Work in progress: Juventus undertakes continuous production of cars, 24 hours a day, seven days a week. An inventory count is to be undertaken at the year end and Milan & Co will attend. You are responsible for the audit of work in progress (WIP) and will be part of the team attending the count as well as the final audit. WIP constitutes the partly assembled cars at the year end and this balance is likely to be material. Juventus values WIP according to percentage of completion, and standard costs are then applied to these percentages. Question: Describe the substantive audit procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to: (i) The Inventory
Juventus Motor Cars Co (Juventus) manufactures a range of motor cars and its year end is 30 June 2019. You are the assistant audit manager of Milan & Co and are currently preparing the audit programmes for the year-end audit of Juventus. You have had a meeting with your audit manager and he has notified you of the following issues identified during the audit risk assessment process:
1. Inventory - Work in progress:
Juventus undertakes continuous production of cars, 24 hours a day, seven days a week. An inventory count is to be undertaken at the year end and Milan & Co will attend. You are responsible for the audit of work in progress (WIP) and will be part of the team attending the count as well as the final audit. WIP constitutes the partly assembled cars at the year end and this balance is likely to be material. Juventus values WIP according to
percentage of completion, and
Question:
Describe the substantive
(i) The Inventory
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