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)Management determines if all inventory has been tagged and counted.The auditor asks management if this task has been done.
D)The auditor determines whether the inventory count tags are properly controlled and that all count tags are returned.

Question

Quizplus · Accepted Answer

During the physical inventory count, the auditor gathers evidence by verifying whether the inventory count tags are properly controlled and that all count tags are returned. This helps to ensure that all items have been counted and that there is no double counting or omission of inventory. Additionally, the auditor may observe the count process, test the accuracy of the count, and perform analytical procedures to further corroborate the inventory balance. Option A is incorrect as it relates to ownership, which is not relevant to the count process, and it does not provide evidence of the accuracy of the count. Option B is incorrect as the auditor should be present during the count process to ensure the accuracy of the count. Option C is also incorrect as it is management's responsibility to ensure that all inventory has been tagged and counted, but it does not provide evidence of the accuracy of the count itself.

How Does the Auditor Gather Evidence During the Physical Inventory