You are an audit senior in the firm, Grant Smithson & Partners, and have been assigned the audit of Handel’s World Ltd, for the year ended 31 March

FIN6002: Audit Assignment
Question 1

You are an audit senior in the firm, Grant Smithson & Partners, and have been assigned the audit of Handel’s World Ltd, for the year ended 31 March 2023. Handel’s World Ltd has been in operation for fifteen years, but has only just appointed Grant Smithson & Partners as its external auditors. The company operates four stores countrywide, selling a quality range of musical instruments such as; electric or acoustic guitars, brass instruments; drums,
percussion instruments; keyboards, pianos, and instrument accessories among others.

For several years, Handel’s World Ltd has maintained perpetual records of inventory at each of its four stores. Nevertheless, it has continued to determine closing inventory by stocktaking at or near the year end. In the course of the year end audit you hold discussions with the company’s chief accountant, and she informs you that the company is intending to dispense
with annual stocktaking and to rely on the perpetual records in determining closing inventory.