The auditor's strategy in performing test counts during the inventory observation is to:
A) concentrate tests on high dollar items and take a representative sample of other items.
B) test all high dollar items.
C) randomly select all test items.
D) concentrate tests in areas where employees seem to be disregarding the inventory instructions.
E) sequentially select all test items.

Question

Quizplus · Accepted Answer

The auditor's strategy often involves focusing on high-value items due to their significant impact on the financial statements, while also taking a representative sample of other items to ensure a broad coverage of the inventory. This approach balances the need for thoroughness with practical considerations of time and resources.

The Auditor's Strategy in Performing Test Counts During the Inventory