The audit procedures used in an observation of the client's physical inventory taking are designed primarily to
A)Test and observe the client's physical count of inventory.
B)Verify independently the physical counts obtained by the client.
C)Assist the client in taking test counts of year-end inventory.
D)Determine whether inventory contains obsolete goods.

Question

Quizplus · Accepted Answer

The audit procedures used in an observation of the client's physical inventory taking are designed primarily to test and observe the client's physical count of inventory. This includes observing the procedures followed by the client, verifying the counts made by the client, and obtaining evidence regarding the effectiveness of the client's inventory counting procedures. The objective of this audit procedure is to determine whether the physical inventory taking process is accurate and reliable.

The Audit Procedures Used in an Observation of the Client's