In the audit of inventory, the entity is responsible for actually making and recording the count of physical inventory; the auditor's responsibility is to evaluate and observe the entity's procedures and draw conclusions about the adequacy of the physical inventory.

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The entity is responsible for conducting and recording the physical inventory count, while the auditor's responsibility is to assess the entity's procedures and determine if the count was accurate and reliable.

In the Audit of Inventory, the Entity Is Responsible for Actually