Obtaining an adequate understanding of the client's business is important in physical observation of inventory because
A)it is required by GAAP.
B)it will help the auditor in assessing the risk of theft of inventory.
C)inventory is normally a significant item.
D)inventory varies significantly for different companies.

Question

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The Answer of Obtaining an adequate understanding of the client's business is important in physical observation of inventory because
A)it is required by GAAP.
B)it will help the auditor in assessing the risk of theft of inventory.
C)inventory is normally a significant item.
D)inventory varies significantly for different companies.

Obtaining an Adequate Understanding of the Client's Business Is Important