Assigned Readings: Chapter 9. Production Cycle Chapter 10. Finance and Investment Cycle

Assigned Readings:

Chapter 9. Production Cycle

Chapter 10. Finance and Investment Cycle

Initial Postings: Read and reflect on the assigned readings for the week. Then post what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding in each assigned textbook chapter.Your initial post should be based upon the assigned reading for the week, so the textbook should be a source listed in your reference section and cited within the body of the text. Other sources are not required but feel free to use them if they aid in your discussion.

Also, provide a graduate-level response to each of the following questions:

Inventory Count Observation: Planning and Substantive Procedures. Sammy Smith is the partner in charge of the audit of Blue Distributing Corporation, a wholesaler that owns one warehouse containing 80 percent of its inventory. Smith is reviewing the audit documentation that was prepared to support the firm’s opinion on Blue’s financial statements and wants to be certain that essential audit procedures are well documented.

Required:

What evidence should Smith expect to find indicating that the observation of the client’s physical count of inventory was well planned and that assistants were properly supervised?

What substantive procedures should Smith find in the audit documentation of management’s balance assertions about existence and completeness of inventory quantities at the end of the year?

[Your post must be substantive and demonstrate insight gained from the course material. Postings must be in the student’s own words – do not provide quotes!]