A useful starting point for becoming familiar with the client's inventory is for the auditor to
A) read the AICPA's Industry Audit Guide.
B) review accounting theory covering special inventory problems.
C) read the client's accounting manual.
D) tour the client's facility.

Question

Quizplus · Accepted Answer

Touring the client's facility allows the auditor to physically observe the inventory and gain a better understanding of how it is organized, stored, and controlled. This can also provide insight into potential inventory-related risks and areas that require further investigation. While reviewing accounting theory and reading the client's accounting manual may provide some helpful information, they do not give the auditor the same level of insight that a physical tour of the facility can provide. The AICPA's Industry Audit Guide may be useful, but it should not be the starting point for becoming familiar with the client's inventory.

A Useful Starting Point for Becoming Familiar with the Client's