An auditor selected items from the client's detailed inventory listing (that agreed to the financial statements). During the physical inventory observation, the auditor then found each item selected and counted the number of units on hand. Assuming that the amount on hand was the same as the amount in the client's detailed inventory listing, this procedure most likely would provide evidence concerning management's assertion of:
A)completeness.
B)valuation.
C)presentation and disclosure.
D)existence.
E)rights and obligations.

Question

Quizplus · Accepted Answer

By physically observing and counting the items selected from the inventory listing, the auditor is obtaining evidence regarding the existence of the inventory items. This procedure confirms whether the inventory actually exists as recorded on the client's inventory listing. It does not provide evidence regarding the completeness, valuation, presentation and disclosure, or rights and obligations assertions.

An Auditor Selected Items from the Client's Detailed Inventory Listing