The costs used to value the physical inventory must be tested to determine whether the client has correctly followed an inventory method that is in accordance with an acceptable financial reporting framework and is consistent with previous years.The audit procedures used to verify these costs are referred to as inventory
A)price tests.
B)compilation tests.
C)cost allocation tests.
D)consistency tests.

Question

Quizplus · Accepted Answer

Inventory price tests are audit procedures used to verify that the costs used to value the physical inventory are accurate and in accordance with an acceptable financial reporting framework, ensuring consistency with previous years.

The Costs Used to Value the Physical Inventory Must Be