This case study analyzes the audit of Quartet Ltd, focusing on the sales revenue and inventory accounts for the year ending December 31, 2018. The assignment requires an assessment of inherent risk, including factors like pricing markdowns and changing sales trends, and the performance of analytical procedures to assess the likelihood of misstatements. The solution identifies weaknesses in internal controls, such as the lack of verification for online sales invoices and the absence of inventory inspections. The document outlines tests of control, including physical inventory counts and the examination of sales invoice samples. Finally, it details substantive procedures, such as matching sales invoices to delivery documents and verifying inventory records. The analysis adheres to Australian Auditing Standards, providing a comprehensive approach to the audit process.