Auditors need to understand the client's physical inventory count controls before the count of the inventory begins so that
A) the auditors can accurately count and tag the inventory for the client.
B) the auditors can make constructive suggestions as to the adequacy of the procedures.
C) the client will be informed on exactly what items the auditor intends to test count.
D) the auditor can communicate any weaknesses directly to the audit committee.

Question

Quizplus · Accepted Answer

Auditors need to understand the client's physical inventory count controls to assess their effectiveness and identify potential weaknesses. This will enable them to make constructive suggestions as to the adequacy of the procedures and improve the accuracy of the inventory count. The other options are not as relevant to the objective of understanding the client's physical inventory count controls.

Auditors Need to Understand the Client's Physical Inventory Count Controls