In a manufacturing company, which one of the following audit procedures would give the least assurance with regards to the valuation and allocation assertion for inventory?
A) Examining paid vendors' invoices.
B) Testing the computation of standard overhead rates.
C) Obtaining confirmation of inventories pledged under loan agreements.
D) Reviewing direct labour rates.

Question

Quizplus · Accepted Answer

Obtaining confirmation of inventories pledged under loan agreements provides assurance about rights and obligations, not valuation and allocation.

In a Manufacturing Company, Which One of the Following Audit