Which of the following internal control procedures most likely addresses the completeness assertion for inventory?

Question

Quizplus · Accepted Answer

Choice "C" is correct. The internal control procedure of prenumbering receiving reports and periodically reconciling them to the inventory records most likely addresses the completeness assertion for inventory, because it allows the auditor to determine whether all goods received have been recorded as inventory. Choice "A" is incorrect. Reconciling the work in process account (per the general ledger) with subsidiary records (direct materials, direct labor, overhead) tests that those records are interfacing properly, but does not provide any information about the completeness assertion for inventory. Choice "B" is incorrect. Separation of employees responsible for custody of finished goods from the receiving function addresses the safeguarding of assets, not the completeness of the inventory records. Choice "D" is incorrect. The separation of duties between the payroll department and inventory accounting personnel is related to the valuation (pricing) of inventory, not its completeness.

Which of the Following Internal Control Procedures Most Likely Addresses