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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 15 · 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.
When selecting a sample of receivables for testing, the auditor decides to select every 10th customer balance from the aged receivables listing, after a random start. What sampling method is being used?
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.
When selecting a sample of receivables for testing, the auditor decides to select every 10th customer balance from the aged receivables listing, after a random start. What sampling method is being used?
Answer options:
Random sampling
Systematic sampling
Haphazard sampling
Stratified sampling
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