A common inventory observation procedure is to select a random sample of tag numbers and identify the tag with that number attached to the actual inventory.The audit objective being achieved by this procedure is
A)inventory as recorded on tags exists (existence).
B)existing inventory is counted and tagged (completeness).
C)inventory is counted accurately (accuracy).
D)inventory is classified correctly (classification).

Question

Quizplus · Accepted Answer

The audit objective being achieved by this procedure of selecting a random sample of tag numbers and identifying the tag with that number attached to the actual inventory is to ensure that inventory as recorded on tags exists, which is the existence objective. This procedure does not provide evidence regarding completeness, accuracy, or classification of inventory.

A Common Inventory Observation Procedure Is to Select a Random