The auditing procedures generally used for the physical observation of inventory and the pricing and compilation of inventory are:
A) analytical procedures and tests of transactions.
B) analytical procedures and tests of details of balances.
C) analytical procedures and control tests.
D) tests of transactions and tests of details of balances.

Question

Quizplus · Accepted Answer

Analytical procedures are used to identify unusual fluctuations or relationships that may indicate errors or fraud. Tests of details of balances are used to verify the accuracy of the inventory balances by examining the supporting documentation.

The Auditing Procedures Generally Used for the Physical Observation of Inventory