A public accountant's client, Anderson Industries Pty Ltd, is a medium-sized manufacturer of products for the leisure-time activities market (camping equipment, scuba gear, archery equipment and so forth). During the past year, an IT system was installed, and inventory records of finished goods and parts were converted to computer processing. The inventory master file is maintained on disk. Each record of the file contains the following information:

• Item or part number

• Description

• Size

• Unit-of-measure code

• Quantity on hand

• Cost per unit

• Total value of inventory on hand at cost

• Date of last sale or usage

• Quantity used or sold this year

• Economic order quantity

• Code number of major vendor

• Code number of secondary vendor.

In preparation for year-end inventory, the client has two identical sets of preprinted inventory count cards. One set is for the client's inventory counts, and the other is for the public accountant's use to make audit test counts. The following information has been printed on the cards:

• Item or part number

• Description

• Size

• Unit-of-measure code.

In taking the year-end inventory, the client's personnel will write the actual counted quantity on the face of each card. When all counts are complete, the counted quantities will be entered in the system. The count data will be processed against the inventory master file and quantity-on-hand figures will be adjusted to reflect the actual count. A computer listing will be prepared to show any missing inventory counts and all quantity adjustments of more than $100 in value. These items will be investigated by client personnel and all required adjustments will be made. When adjustments have been completed, the final year-end balances will be calculated and posted to the general ledger. The public accountant has available generalised audit software that is compatible with the client's system.

REQUIRED

a. In general, and without regard to the facts above, discuss the nature of generalised audit software and list the various types and uses.

b. List and describe at least five ways in which GAS can be used to assist in all aspects of the audit of the inventory of Anderson Industries. (For example, the software can be used to read the inventory master file and list items and parts with a high unit cost or total value. Such items can be included in the test counts to increase the dollar coverage of the audit verification.)