Which of the following auditing procedures most likely would provide assurance about a manufacturing entity's inventory valuation?

Question

Quizplus · Accepted Answer

Choice "A" is correct. Testing the entity's computation of standard overhead rates generally provides assurance about a client's inventory valuation. Choice "B" is incorrect. Obtaining confirmation of inventories pledged under loan agreements provides assurance about the appropriate presentation, description, and disclosure of such matters in the financial statements. Choice "C" is incorrect. Reviewing shipping and receiving cutoff procedures for inventories provides assurance about completeness and existence of inventory. Choice "D" is incorrect. Tracing test counts to the entity's inventory listing provides assurance about the completeness of the client's listing.

Which of the Following Auditing Procedures Most Likely Would Provide