The Inventory of Brown Company Is Distributed Between 85 Stores

question 86

Multiple Choice

The inventory of Brown Company is distributed between 85 stores throughout the United States,Puerto Rico and Mexico.Brown has a calendar year-end,uses a periodic inventory system and performs a physical count on January 1st of each year.In the planning of the audit of Brown,the engagement team must consider which of the following?

• A)Whether or not the finance departments in Mexico and Puerto Rico are available to perform the audit testing on January 1st.
• B)Which of the stores to randomly visit and how many items to test.
• C)The risk of the company transporting items from Maine to Mexico between audit counts.
• D)Coordinating with the client which stores will be visited for inventory observation.

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