Companies outsource their inventory services. These service companies typically specialize in counting, pricing, extending, and footing inventories. They will then issue a certificate attesting the value of the physical inventory. Assume the service company counted its client's inventory on the balance sheet date. Required:
a. How much reliance, if any, can the auditor's place on the service company's certificate?
b. What effect, if any, would the inventory certificate have on the type of report the auditors would render? Discuss.
c. What reference, if any, would the auditors make to the certificate in their audit report.

Answer rating: 100% (QA)

a The auditors do not respect the inventory certificate of an external service company as an acceptable substitute for their personal audit of the por... View the full answer