How does the auditor gather evidence during the physical inventory count?
A)The auditor determines that the items on hand that are not owned by the client are counted.
B)The auditor begins the test count process after the client has finished counting the inventory.
C)The auditor observes that all inventory has been tagged and counted.
D)The auditor observes that client personnel are performing test counts in the areas where they are most familiar with the inventory.

Question

Quizplus · Accepted Answer

During the physical inventory count, the auditor gathers evidence by observing that all inventory has been properly tagged and counted. This includes verifying that all items have been included and none have been double-counted or omitted. The auditor may also perform test counts in areas where there are concerns about the accuracy of the inventory count. It is important for the auditor to be present during the entire inventory count process to ensure that all procedures are followed correctly and to address any issues that arise.

How Does the Auditor Gather Evidence During the Physical Inventory