An auditor may select a sample of items from the inventory records and inspect them for consistency with the category of the records. The purpose of this test of controls is to ensure that:
A) recorded inventory exists.
B) inventories are physically protected from theft or damage.
C) policies for assessing inventory valuation are appropriate.
D) proper procedures are followed for the process of the physical count.

Question

Quizplus · Accepted Answer

The purpose of selecting a sample of items from the inventory records and inspecting them is to ensure that the recorded inventory actually exists. This helps to test the control over the completeness and accuracy of inventory records. The other options (B, C, and D) are also important controls over inventory, but they are not being directly tested through this particular test of controls.

An Auditor May Select a Sample of Items from the Inventory