Your Audit Client, Wigley, Is a Retail Department Store That

Essay

Your audit client, Wigley, is a retail department store that does not produce any products. You are currently working on the inventory portion of the audit. In obtaining audit evidence in support of financial statement assertions, the auditor develops specific audit objectives in response to those assertions. Audit procedures are then selected to accomplish audit objectives.
For each specific inventory audit objective listed (Audit Objectives tab) select the most closely related account balance financial statement assertion and the most appropriate audit procedure. Financial statement assertions and audit procedures may be selected once, more than once, or not at all. $\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|l|l|}\hline &\text { Specific audit objectives } & \text { (A) } & \text { (B) } & \text { (C) } & \text { (D) } & \text { (E) } & \text { (F) } & \text { (G) } & \text { (H) } & \text { (I) } & \text { (J) } & (\mathrm{K}) \\\hline 1.&\text { The entity has legal title to inventories. } & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0&0 \\\hline 2. &\text { Recorded inuentory quantities include all products on hand. } & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0&0 \\\hline 3. &\text{Inventories are reduced, when appropriate, to replacement}\\&\text{ costs or net realizable value.}& 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0&0 \\\hline 4. &\text{Cost of imentories is properly calculated.}& 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0&0 \\\hline 5. &\text{The major categories of inventories and their basis of}\\&\text{valuation are adequately reported in the financial statements.}& 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0&0 \\\hline\end{array}$