Consider the following audit work performed by two auditors, Suzy and Gary:(a) Suzy attended the client’s year-end stocktake and observed that the client followed the stocktake instructions. She selected numerous items for test counting from the client’s inventory sheets and all were found to be correct. Cut-off details were noted and subsequently checked and found to be correctly treated. Suzy concluded that inventory was fairly stated.(b) Maintenance expenses were material, although it was only 50% of last year’s balance. Gary selected a large sample of entries and agreed them to supporting documents. No errors were found. Gary concluded that maintenance expenses were reasonable. Required:Indicate whether sufficient appropriate audit evidence has been obtained to support the conclusions for the inventory and maintenance expenses accounts.Explain your answers.
Consider the following audit work performed by two auditors, Suzy and Gary:
(a) Suzy attended the client’s year-end stocktake and observed that the client followed the stocktake instructions. She selected numerous items for test counting from the client’s inventory sheets and all were found to be correct. Cut-off details were noted and subsequently checked and found to be correctly treated. Suzy concluded that inventory was fairly stated.
(b) Maintenance expenses were material, although it was only 50% of last year’s balance. Gary selected a large sample of entries and agreed them to supporting documents. No errors were found. Gary concluded that maintenance expenses were reasonable.
Required:
Indicate whether sufficient appropriate audit evidence has been obtained to support the conclusions for the inventory and maintenance expenses accounts.
Explain your answers.
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