During discussion and inquiry with management,the auditor determined that the company has started a new line of business that requires a substantial investment in manufacturing equipment.The company has also implemented wireless scanning for its warehouse and inventory.Which of the following techniques will the auditor likely use to corroborate these statements?
A)further inquiry of the accounting personnel
B)inspection of recent sales invoices for types of sales
C)use of analytical procedures,comparing last year to this year
D)observation during the plant tour

Question

Quizplus · Accepted Answer

Observation during the plant tour would be the best way to corroborate the statements regarding the new line of business and the investment in manufacturing equipment. The auditor can visually inspect the equipment and confirm its use in the new line of business. Additionally, the auditor can observe the wireless scanning in action in the warehouse and inventory. This provides direct and reliable evidence of the company's investment and changes in operations, rather than relying on inquiries or analytical procedures.

During Discussion and Inquiry with Management,the Auditor Determined That the Company