In an audit of inventories, an auditor would most likely verify that: a. All inventory owned by the client is on hand at the time of the count. b. The client has used proper inventory pricing to reflect fair market value. c. The financial statement presentation of inventories is appropriate. d. Damaged goods and obsolete items have been recorded at historical cost. e. Goods-in-Transit, shipped to the client F.O.B. destination, are p

Q: Q. If the auditor traces a sample of receiving reports to the inventory records, the auditor is…

A: The objective of the question is to determine whether the statement is true or false. The statement…

Q: In which of the following situations would observation not provide the most compelling audit…

A: Introduction:- Audit evidence includes all of the information used by the auditor to support the…

Q: Explain whether or not analytical review procedures would be sufficient for the audit of the…

A: Auditing is the examination and verification of the financial statements prepared by the entity and…

Q: Delaney Humphrey was explaining the importance of documentary evidence. Which assertion was she…

A: The audit is the detailed process of checking and verifying books of accounts and financial…

Q: A typical substantive procedure for inventory balance and purchase transactions may include…

A: The question is related to the Substantive audit procedures. The Substantive audit procedures are…

Q: attendance of the auditors during the physical inventory coun

A: Answered:

Q: What type of substantive testing (not test of controls) should be used for each of the following…

A: Substantive  testing is also known as substantive procedures, which are the procedures an auditor…

Q: The receiving department compares the quantity received with the quantity prin on the receiving…

A: PO termed as Purchase order refers to the document which legally binds and it is created through…

Q: Which of the following procedure is designed to prevent the company from ordering unnecessary items?…

A: D) Approval of purchase requisitions is the procedure designed to prevent the company from ordering…

Q: Which of the following is an analytical procedure? a. Analysis of significant ratios and trends b.…

A: Analytical  procedures are performed to evaluate the financial information.

Q: Analytical procedures involve: Watching physical inventory counts and distribution of wages. Getting…

A: The analytical procedures are used by experienced auditors at every stage in auditing. These involve…

Q: When auditing merchandise inventory at year-end, the auditor performs audit procedures toensure that…

A: option B) Existence

Q: The auditor computed inventory turnover and compared it to prior years.  This substantive test…

A: Auditing inventory refers to cross-checking the physical inventory with the inventory reported in…

Q: 1)Which of the following is not an audit procedure for inventories? a)Review cut-off of inventory…

A: The objective of the first question is to identify the option that is not an audit procedure for…

Q: Which of the following procedures is usually performed by the auditor to determine if obsolete…

A: Obsolete inventory is an inventory that gets obsolete and remains unserviceable and loses its…

Q: Explain why you agree or disagree with the following statement:“In most audits, it is more important…

A: I agree with the given statement as in most audits, it is much important to test carefully the…

Q: For companies that use a perpetual inventory system, all of the following are reasons for taking a…

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold on the…

Q: You are testing inventory.  You determined that inventory exists, nothing is missing from inventory,…

A: The following are some examples of inventory risks: Due to the difficulty of valuing inventory, it…

Q: (7) ( ) When the auditor want to know the change of cost-allocated method of several products, which…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: When auditing merchandise inventory at year-end, the auditor performs audit proceduresto obtain…

A: Given information is: When auditing merchandise inventory at year-end, the auditor performs audit…

Q: Analyze some common internal controls over inventories. Explain the significant inherent risks…

A: Introduction: Depreciation is an accounting procedure that distributes the cost of an item over its…

Q: The accounts in the working trial balance are usually the summary accounts to appear in the…

A: A trial balance is a bookkeeping worksheet in which the balance of all ledgers are compiled into…

Q: Inquiries of warehouse personnel concerning possible obsolete inventory items provide assurance…

A: The value of inventory, the lower of cost and net realizable value, and obsolete items are among…

Q: 3. Allocation and valuation. 4. Understandability and classification. 1, 2.

A: Financial statements refer to the collection of all the balance sheets, income statements, etc to…

Q: Which of the following timing of inventory count is the best based on the auditor’s point of view…

A: Answer: Concept Control risk               Control risk means risk that the internal control…

Q: Required information Potential Misstatements in the Auditing of Inventory Read the overview below…

A: As inventory is an integral part of balance sheet of any entity mainly manufacturing businesses and…

Q: Explain the appropriate accounting treatment required when an inventory error is discovered.

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: Management decided to undertake a physical inventory count in resolving a perceived weakness in the…

A: In case of trading and manufacturing businesses, inventory is one of the most important part of the…

Q: STATEMENT 1: The broad categories of assertions are the basis of the auditor in develaping specific…

A: Management Assertion: It is the  claims made by members of management  and is used in regard to the…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.