"Physical examination" is the inspection or count by the auditor of items such as
A) cash, inventory, and payroll timecards.
B) cash, inventory, canceled checks, and sales documents.
C) cash, inventory, canceled checks, and tangible fixed assets.
D) cash, inventory, securities, notes receivable, and tangible fixed assets.

Question

Quizplus · Accepted Answer

Physical examination as an audit procedure involves the inspection or count by the auditor of tangible assets. This includes cash, inventory, securities (like stocks or bonds), notes receivable (which are financial assets), and tangible fixed assets (like machinery, buildings, and equipment). This method helps auditors verify the existence and condition of these assets.

"Physical Examination" Is the Inspection or Count by the Auditor