An auditor will usually trace the details of the test counts made during the observation of the physical inventory count to a final inventory schedule. This audit procedure is undertaken to provide evidence that items physically present and observed by the auditor at the time of the physical inventory count are:
A)owned by the entity.
B)not obsolete.
C)physically present at the time of the preparation of the final inventory schedule.
D)included in the final inventory schedule.

Question

Quizplus · Accepted Answer

The purpose of tracing the details of the test counts made during the observation of the physical inventory count to a final inventory schedule is to provide evidence that the items observed by the auditor are included in the final inventory schedule. This procedure confirms the accuracy of the inventory count and ensures that all items that should be included in the inventory are recorded. Options A and B are irrelevant to this particular procedure, while option C is not necessarily true as the final inventory schedule may have been prepared at a later date.

An Auditor Will Usually Trace the Details of the Test