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a) Identify and explain the two key assertions at risk in relation to inventory(b) Identify and describe two substantive audit procedures that you could perform in response to each risk identified above(c) Explain the requirement of ASA 701 Communicating Key Audit Matters in the Auditor’s Report and the rationale for this auditing standard. Determine if the above matters are key audit matters, providing full rationale for the determination. If it is determined that they are Key Audit Matters, provide the disclosures which are required in Key Audit Matters Section of the Auditor’s report as required under ASA 701.(i) The best-selling computer presentation package has been experiencing a high level of returns owing to suspected software problems(ii) Based on closing inventory, inventory turned over an average of 5.4 times in 2017 and 3.8 times in 2018(iii) Advanced Computer Solutions moved its inventory from a central warehouse to six new regional warehouses in March 2018(iv) Inventory on hand at end of year represented 26 per cent of sales in 2018 and 18 per cent of sales in 2017
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