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Problem:
(a) Your client has sought your advise on the procedures to be adopted for carrying out the stocktaking which is based on a year-end count. You are required to prepare a set of instructions for your client.
(b) The auditor must satisfy himself as to the validity of the amount attributed to stock in the balance sheet. The auditor's duties are usually divided into three phases.
(i) before the stocktaking (ii) during the stocktaking (iii) after the stocktaking
You are required to write short notes on the duties of an auditor in each phase of the stocktaking process.
Explain the independence between the auditor and the client on financial statement audit engagements
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