Tests of account balances are intended to obtain audit evidence
Tests of account balances are intended to obtain audit evidence about the fairness of the inventory accounts or, alternatively, identify material misstatements in the amounts presented. Audit procedures can only be selected after the auditor determines specific audit objectives related to management assertions.
Management Assertions
1. Existence or Occurrence
2. Completeness
3. Rights and Obligations
4. Valuation and Allocation
5. Presentation and Disclosure

For each audit procedure below, identify the related management assertion(s) that the audit procedure tests and explain the audit objective of the procedure.
a. Trace totals of inventory files to the general ledger, including proper classification as raw materials, WIP, finished goods
b. Test additions to inventory by a selecting sample of recorded purchases from the inventory records and examining supporting documents
c. Review consignment contracts and scan inventory records for inclusion of amounts for any consigned items not owned
d. Re-perform calculations supporting decisions about write downs or write offs of inventory and trace any adjustment amounts to the inventory records
e. Using computer auditing techniques re-perform calculations testing mathematical accuracy including totals extensions of price and quantity and unit or batch aggregations; recalculation is based on appropriate application of client costing method (FIFO, LIFO, weighted average, specific identification, etc.)

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