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Posted: April 13th, 2023

Answer A Questions essay

We learned this week that physical inventory count is so important that auditing standards made it a required audit procedure. Then what happens when it becomes impossible for auditors to access inventory physically? As we know, that is not a hypothetical question anymore. The below articles from Journal of Accountancy and KPMG describes the problem and presents alternative methods auditors are using to overcome the new challenge.

Article 1: How auditors can test inventory without a site visit (Journal of Accountancy)
Article 2: Physical inventory count amid COVID-19 (KPMG)
Initial/Original PostThe articles present an 1) alternative procedure that the auditors can use if it is not possible to conduct physical inventory (conducting physical count and rollforward (or rollback)) and an 2) alternative tool that auditors can use if the company is conducting the physical count but the auditor cannot be present in the premise (Video Observation).1. Discuss the advantage and disadvantage of each method.2. There are a lot of discussions in the world about how some things we adopted during the pandemic are going to become ‘new-normal’. Do you think video observation is here to stay in post-COVID era? Explain your position.In addition to addressing the above questions, you can also discuss any additional topic or ask questions to one another. Your initial post should be approximately 200-300 words.

Article 1: https://www.journalofaccountancy.com/news/2020/mar/auditing-how-to-observe-inventory-during-coronavirus-pandemic.html

Article 2: attached

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