In performing audit tests of the client's cost accounting system, the auditor is primarily concerned with which of the following?
A) System is functioning properly in providing costing and pricing information for management.
B) Costs have been properly assigned to finished goods, work-in-process, and cost of goods sold.
C) Inventory counts agree with the client's accounting records.
D) The client's cost accounting system is designed on the basis on acceptable cost accounting systems.

Question

Quizplus · Accepted Answer

The auditor's primary concern in performing audit tests of the client's cost accounting system is to ensure that costs have been properly assigned to finished goods, work-in-process, and cost of goods sold. This ensures that the financial statements accurately reflect the cost of goods sold and the inventory valuation. The other options may also be of concern to the auditor, but they are not the primary focus of the audit tests of the cost accounting system.

In Performing Audit Tests of the Client's Cost Accounting System