Auditing & Assurance Services 6th Edition by Timothy Louwers

Exercise 11

A client maintains perpetual inventory records in quantities and in dollars. If the assessed control risk is high, an auditor would probably
A) Apply gross profit tests to ascertain the reasonableness of the physical inventory counts.
B) Increase the extent of tests of controls relevant to the inventory cycle.
C) Request the client to schedule the physical inventory count at the end of the year.
D) Insist that the client perform physical inventory counts of inventory items several times during the year.