When a physical count of inventory is performed at an interim date, the auditor observes it at that time and tests the perpetual records for transactions
A) throughout the year.
B) which are a representative sample of the period under audit.
C) from the date of the count to year-end.
D) from the date of the count to the end of the audit field work.

Question

Quizplus · Accepted Answer

The auditor tests the perpetual records for transactions from the date of the count to year-end to determine the accuracy and completeness of the inventory records for the rest of the period under audit. This is because any discrepancies between the physical count and the perpetual records could have occurred during the period after the count and before year-end. Therefore, testing transactions from the date of the count to year-end would provide a reasonable representation of the period under audit.

When a Physical Count of Inventory Is Performed at an Interim