The Auditor Has Evaluated the Effectiveness of the Client's Procedures

question 46

Multiple Choice

The auditor has evaluated the effectiveness of the client's procedures to count inventory,and has provided constructive suggestions for improvement.However,the client has not implemented the suggestions,so the auditor has concluded that the inventory instructions do not provide adequate controls.This means that the auditor

• A)must send a management letter informing management of the impact of these weaknesses.
• B)must spend more time ensuring that the physical count is accurate.
• C)should use attribute sampling to select a smaller sample for testing the physical inventory.
• D)should increase the level of price and compilation tests to ensure better quality inventory pricing data.

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Definitions:

Metabolic Waste Products

Substances left over from metabolic processes, which the body needs to excrete because they cannot be used and are harmful if accumulated.

Urine

A liquid by-product of metabolism in humans and many animals, excreted by the kidneys and containing waste materials.

Bladder

An organ that stores urine produced by the kidneys before it is expelled from the body.

Dendrites

Branched extensions of a neuron that receive signals from other neurons or sensory cells and transmit them towards the cell body.