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Individually, research authoritative sources such as Statements on Auditing Standards (SAS), financial accounting standards (FAS), and any other authoritative accounting pronouncements for information on completing a comprehensive audit program for the observation of physical inventory. Accounting textbooks are NOT authoritative sources.
Based on your findings, prepare a 4-6 page, double-spaced paper containing an audit program detailing how to properly observe the taking of physical inventory at Hydromaint. Include the following in your paper:
Identification of inventory observation issues including potential inherent risks and control risks when valuating physical inventory.
Brief description and citation of applicable accounting rules on inventory observation.
Detailed pre-audit steps and the reason(s) for each step.
Inventory observation steps and the reason(s) for each step. Include steps to mitigate risks.
Conclusion on issues as they relate to Hydromaint’s inventory.
Sources cited according to APA guidelines (on an additional page at the end of the program).
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