(b)

(i) Up to 1 mark per well described procedure, overall maximum of 8 marks.
Before the count
– Review the prior year audit files to identify significant inventory issues from last year
– Discuss with management if any new warehouses or any sites have significant control issues
– Decide which of the 12 warehouses the audit team members will attend
– Review a copy of the proposed inventory count instructions
During the count
– Observe the counters to confirm if inventory count instructions are being followed
– Perform test counts inventory to sheets and sheets to inventory
– Confirm procedures for damaged goods are operating correctly
– Observe procedures for movements of inventory during the count
– Obtain a photocopy of the completed inventory sheets
– Identify and make a note of the last goods received notes and goods despatched notes
– Discuss with the internal audit supervisor how he has estimated the raw materials quantities 
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(ii) Up to 1 mark per well described procedure, overall maximum of 4 marks.
– Cast the schedule of intangible assets
– Agree the opening balances to the prior year financial statements
– Agree the closing balances to the general ledger, trial balance and draft financial statements
– Recalculate amortisation charged in the year and confirm in line with the policy of straight line
over five years
– For new projects, discuss with management the stage of development and if capitalised or
expensed
– For those expensed as research, agree costs to invoices, supporting documentation and to
inclusion in profit or loss
– For those capitalised as development, agree costs to invoice and confirm technically feasible by
discussion with development managers or review of feasibility reports
– Review market research reports to confirm Andromeda has the ability to sell the product
– Review the disclosures in the financial statements in accordance with IAS 38 Intangible Assets 
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