Describe the substantive auditing procedures


Solve the below problem:

Q: (Computer-Assisted Substantive Tests for Inventory) Brown, CPA, is auditing the financial statements of Big Z Wholesaling, Inc., a continuing audit client, for the year ended January 31, 20X2. On January 5, 20X2, Brown observed the tagging and counting of Big Z's physical inventory and made appropriate test counts. These test counts have been recorded on a computer file. As in prior years, Big Z gave Brown two computer files. One file represents the perpetual inventory (FIFO) records for the year ended January 31, 20X2. The other file represents the January 5 physical inventory count.

Required

Describe the substantive auditing procedures Brown may consider performing with computerized audit software using Big Z's two computer files and Brown's computer file of test counts. The substantive auditing procedures described may indicate the reports to be printed out for Brown's followup by subsequent application of manual procedures. Do not describe subsequent manual auditing procedures. Group the procedures by those using

(a) the perpetual inventory file and

(b) the physical inventory and test count files.

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Auditing: Describe the substantive auditing procedures
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