SECTION A - CASE 3: HARVESTYIELD AGRITECH
HarvestYield AgriTech manufactures smart farming equipment. You are auditing the financial statements for the year ended 31 December 20X6. The company recently introduced a new line of AI-driven tractors, making older models potentially obsolete. Inventory is held at 15 different regional depots. The company uses a bespoke computerized inventory system. You are planning the inventory count attendance and the substantive testing of receivables, as several farming clients have requested extended payment terms due to a poor harvest season.
Which of the following financial statement assertions is most at risk regarding the older models of tractors held in inventory?
ACCA · Question 12 · Audit Evidence
SECTION A - CASE 3: HARVESTYIELD AGRITECH
HarvestYield AgriTech manufactures smart farming equipment. You are auditing the financial statements for the year ended 31 December 20X6. The company recently introduced a new line of AI-driven tractors, making older models potentially obsolete. Inventory is held at 15 different regional depots. The company uses a bespoke computerized inventory system. You are planning the inventory count attendance and the substantive testing of receivables, as several farming clients have requested extended payment terms due to a poor harvest season.
Which of the following describes a valid use of Computer Assisted Audit Techniques (CAATs) using audit software to test the inventory of HarvestYield AgriTech?
Answer options:
Inputting dummy inventory data into the client's bespoke system to see if it rejects negative quantities.
Recalculating the extension of quantities multiplied by unit costs across the entire inventory database.
Observing the physical inventory count via remote drone cameras.
Reviewing the IT general controls over the bespoke computerized inventory system.
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