Discussion Post: External Audit- Verification of Inventories
Many companies employ outside service companies that specialize in counting, pricing, extending, and footing inventories. These service companies usually furnish a certificate attesting to the value of the physical inventory.
Task:
Assuming that the service company took the client company's inventory on the balance sheet date:
• How much reliance, if any, can the auditors place on the inventory certificate of outside specialists?
• What effect, if any, would the inventory certificate of outside specialists have upon the type of report the auditors would render? Discuss.
• What reference, if any, would the auditors make to the certificate of outside specialists in their audit report?
The response must include a reference list. One-inch margins, double-space, Using Times New Roman 12 pnt font and APA style of writing and citations.