Many companies employ outside service companies that specialize in counting, pricing, extending, and footing inventories. These service

Question:

Many companies employ outside service companies that specialize in counting, pricing, extending, and footing inventories. These service companies usually furnish a certificate attesting to the value of the physical inventory.
Assuming that the service company took the client company’s inventory on the date:
a. How much reliance, if any, can the auditors place on the inventory certificate of outside specialists?
b. What effect, if any, would the inventory certificate of outside specialists have upon the type of report the auditors would render? Discuss.
c. What reference, if any, would the auditors make to the certificate of outside specialists in their audit report? Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...