Case StudyCarosel Limited is a specialty motor vehicle parts supplier, procuring parts from a largenumber of suppliers. As part of the interim audit work four weeks prior to the companyyear’s end, you are testing the procurement/purchases systems, attending the inventory countand examining the sales and cash receipts.Purchasing/Procurement System When the quantity of a specific part falls below re-order level, an e-mail is sent to theprocurement department detailing the part required and the quantity to order. Partsinventory is monitored by the store’s manager with a copy of the e-mail filed on thestore manager's computer. Procurement department staff check the e-mail, allocate the order to an authorisedsupplier and send the order to that supplier using Electronic Data Interchange (EDI).The order is identified by a unique order number with a copy of the EDI order filed inthe order database by the computer system. When goods are received at Carosel, the stores clerk confirms that the inventoryagrees to the delivery note. The clerk also checks the order database to ensure that theinventory were in fact ordered by Carosel since delivery is refused where goods donot have a delivery note. The order in the order database is updated to confirm receipt of goods, and theperpetual inventory system updated to show the receipt of inventory. The physicalgoods are added to the parts store and the paper delivery note is stamped with theorder number and is filed in the goods inwards department. The supplier sends a purchase invoice to Carosel using EDI; invoices areautomatically routed to the accounts department. On receipt of the invoice, theaccounts clerk checks the order database, matches the invoice details with thedatabase and updates the database to confirm receipt of invoice. The invoice is addedto the purchases database, where the purchase day book (PDB) and suppliersindividual account in the payables ledger are automatically updated.Attending the Inventory countOn the day of the inventory count, you attended site 4 at Carosel. You observed thefollowing activities: Pre-numbered count sheets were being issued to client's staff carrying out the count.The count sheets showed the inventory ledger balances for checking against physicalinventory. All count staff were drawn from the inventory warehouse and were counting in teamsof two. Three counting teams were allocated to each area of the stores to count, although theteams were allowed to decide which pair of staff counted which inventory within eacharea. Staff were warned that they had to remember which inventory had been counted. Information was recorded on the count sheets in pencil so amendments could be madeeasily as required. Any inventory not located on the pre-numbered inventory sheets was recorded onseparate inventory sheets – which were numbered by staff as they were used. At the end of the count, all count sheets were collected and the numeric sequence ofthe sheets checked; the sheets were not signed.Sales and Cash Receipts Carosel has experienced substantial success, with customer numbers increasing byapproximately 15% annually. Sales at Carosel are categorized as cash sales and credit card sales. All sales arerecorded on a computer, including the amount of each sale and the parts issued. Thisinformation is electronically transferred to the accounts office. Cash collected from each office is counted by two accounts clerks and two securityguards before being banked daily. The total cash is reconciled with the salesinformation transferred. The cash received is then recorded in the cash book and general ledger. What are the audit procedures that an auditor will normally perform prior to attendingthe client's premises on the day of the inventory count?