Wares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded to offer a wide variety of home decorating products through its six stores across the state. After some initial problems with stock control it installed a new automated inventory system in April this year. The system replaced another automated system that had been modified so often over the years that the auditor had advised Wares's management that they did not regard it as reliable. That is, the auditor was unable to rely on the old system sufficiently to assess control risk for inventory as anything less than high. Required: a) Explain the normal process an auditor would expect to find in the client's systems governing changes to computer programs. Why is an auditor concerned about program changes? b) Wares kings financial year-end is 31 December. Does the auditor need to obtain evidence about the performance of the inventory control system from every month in the year or from a sample of months? Explain. c) If the auditor conducts test of the inventory controls at an interim date, is it appropriate to conclude that the controls also relate to the end of period date? Why? -

Wares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded to offer a wide variety of home decorating products through its six stores across the state. After some initial problems with stock control it installed a new automated inventory system in April this year. The system replaced another automated system that had been modified so often over the years that the auditor had advised Wares's management that they did not regard it as reliable. That is, the auditor was unable to rely on the old system sufficiently to assess control risk for inventory as anything less than high. Required: a) Explain the normal process an auditor would expect to find in the client's systems governing changes to computer programs. Why is an auditor concerned about program changes? b) Wares kings financial year-end is 31 December. Does the auditor need to obtain evidence about the performance of the inventory control system from every month in the year or from a sample of months? Explain. c) If the auditor conducts test of the inventory controls at an interim date, is it appropriate to conclude that the controls also relate to the end of period date? Why? -

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 1RP: Your client, Daves Sport Shop, sells sports equipment and clothing in three retail outlets in New...

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Wares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded to offer a wide variety of home decorating products through its six stores across the state. After some initial problems with stock control it installed a new automated inventory system in April this year. The system replaced another automated system that had been modified so often over the years that the auditor had advised Wares’s management that they did not regard it as reliable. That is, the auditor was unable to rely on the old system sufficiently to assess control risk for inventory as anything less than high. Required: Explain the normal process an auditor would expect to find in the client’s systems governing changes to computer programs. Why is an auditor concerned about program changes? Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence about the performance of the inventory control system from every month in the year or from a sample…
Wares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded to offer a wide variety of home decorating products through its six stores across the state. After some initial problems with stock control it installed a new automated inventory system in April this year. The system replaced another automated system that had been modified so often over the years that the auditor had advised Wares’s management that they did not regard it as reliable. That is, the auditor was unable to rely on the old system sufficiently to assess control risk for inventory as anything less than high.Required:a) Explain the normal process an auditor would expect to find in the client’s systems governing changes to computer programs. Why is an auditor concerned about program changes? b) Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence about the performance of the inventory control system from every month in the year or from a sample…
Wares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded tooffer a wide variety of home decorating products through its six stores across the state. After someinitial problems with stock control, it installed a new automated inventory system in April this year.The system replaced another automated system that had been modified so often over the years thatthe auditor had advised Wares’ management that they did not regard it as reliable. That is, theauditor was unable to rely on the old system sufficiently to assess control risk for inventory as anythingless than high.Required:a) Explain the normal process an auditor would expect to find in the client’s systems governingchanges to computer programs. Why is an auditor concerned about program changes? b) Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence aboutthe performance of the inventory control system from every month in the year or from a sampleof…
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Wares king supplies customer fitted curtains and blinds to retail cutomers ut has recently expanded to offer a wide variety of home decorating product through its six stores across the state after some intial problems with stock control it installeda few automated inventory system in april ths system replaced other automated system required explain the normal process an auditor woyld expect to find in the clients systems governing chnages to computer programs why it as auditor concerned about program changes wares king finacial year end 31 December does the auditor need to obtain evidence abot the performance if tge auditor conduct test of the inventory it appropriate to conclude that the controls also relate to the end of the period
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