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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 14 · 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 TWO of the following procedures should the auditor perform DURING the physical inventory count at the regional depots? (Select TWO)
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 TWO of the following procedures should the auditor perform DURING the physical inventory count at the regional depots? (Select TWO)
Answer options:
Review the final inventory valuation sheets to ensure obsolete items are written down.
Observe the client's staff to ensure they are following the count instructions.
Perform test counts from the inventory sheets to the physical inventory and vice versa.
Agree the total value of inventory on the system to the general ledger.
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