Which of the following procedures will usually be performed by the auditor to determine if obsolete inventory exists?
A)Confirmation of inventory with customers.
B)Footing the inventory subsidiary ledger.
C)Tracing inventory ordered by the client to receiving reports.
D)Analysis of inventory turnover and sales reports.

Question

Quizplus · Accepted Answer

The analysis of inventory turnover and sales reports would provide insight into whether inventory is sitting idle or not moving, which could lead to obsolescence. Confirmation of inventory with customers, footing the inventory subsidiary ledger, and tracing inventory ordered to receiving reports may provide other assurance over inventory, but would not specifically address the issue of obsolescence.

Which of the Following Procedures Will Usually Be Performed by the Auditor