From which of the following evidence-gathering audit procedures would an auditor obtain most assurance concerning the existence of inventories?
A) observation of physical inventory counts
B) written inventory representations from management
C) confirmation of inventories in a public warehouse
D) auditor's recomputation of inventory extensions

Question

Quizplus · Accepted Answer

Observation of physical inventory counts provides the auditor with the most direct and reliable evidence for the existence of inventories because it involves the auditor physically observing the inventory and verifying its existence. Written representations from management, confirmation of inventories in a public warehouse, and recomputation of inventory extensions can provide some evidence but are not as reliable as observation of physical inventory counts.

From Which of the Following Evidence-Gathering Audit Procedures Would an Auditor