The auditor has determined that the inventory procedures are highly automated with limited use of a paper or physical trail.Rather than having people count inventory (since all inventory has RFID tags attached),inventory is being read using the wireless mesh network.To provide assurance with respect to ending inventory,the auditor should
A)bring in additional audit staff and conduct a high level of test counts,matching these counts to the automated systems.
B)use dollar-unit sampling to identify all high-dollar inventory items and ask the client to physically count these items using count teams.
C)test the quality of the controls over the programs in use and over tagging inventory items.
D)request that the client implement manual rotating counts to test the quality of the automated systems.

Question

Quizplus · Accepted Answer

Since the inventory procedures are highly automated, it is important for the auditor to test the quality of the controls over the program in use and over tagging inventory items. This will help to ensure the accuracy and completeness of the inventory records. Option A is not necessary since the inventory procedures are automated. Option B is not ideal as it may be time-consuming to physically count high-dollar inventory items. Option D is also not necessary since manual rotating counts may not provide better assurance than the automated system in use.

The Auditor Has Determined That the Inventory Procedures Are Highly