Which of the following auditing procedures probably would provide the most reliable evidence concerning the entity’s assertion of rights and obligations related to inventories?a. Trace test counts noted during the entity’s physical count to the entity’s summarization of quantities.b. Inspect agreements to determine whether any inventory is pledged as collateral or subject to any liens. c. Select the last few shipping documents used before the physical count and determine whether the shipments were recorded as sales.d. Inspect the open purchase order file for significant commitments that should be considered for disclosure.
Which of the following auditing procedures probably would provide the most reliable evidence concerning the entity’s assertion of rights and obligations related to inventories?a. Trace test counts noted during the entity’s physical count to the entity’s summarization of quantities.b. Inspect agreements to determine whether any inventory is pledged as collateral or subject to any liens. c. Select the last few shipping documents used before the physical count and determine whether the shipments were recorded as sales.d. Inspect the open purchase order file for significant commitments that should be considered for disclosure.
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter8: Specialized Audit Tools: Sampling And Generalized Audit Software
Section: Chapter Questions
Problem 28MCQ
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Which of the following
a. Trace test counts noted during the entity’s physical count to the entity’s summarization of quantities.
b. Inspect agreements to determine whether any inventory is pledged as collateral or subject to any liens.
c. Select the last few shipping documents used before the physical count and determine whether the shipments were recorded as sales.
d. Inspect the open purchase order file for significant commitments that should be considered for disclosure.
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