The Most Reliable Procedure for an Auditor to Use to Test

question 51

Multiple Choice

The most reliable procedure for an auditor to use to test the existence of a client's inventory at an outside location would be to:

• A)Observe physical counts of the inventory items.
• B)Trace the total on the inventory listing to the general ledger inventory account.
• C)Obtain a confirmation from the client indicating inventory ownership.
• D)Analytically compare the current-year inventory balance to the prior-year balance.

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Definitions:

Market Values

The valuation at which an asset could be bought or sold in a current market, regardless of its original cost or book value.

Financial Manager

A financial manager is responsible for managing a company's financial planning, funding, and investment strategies to support the organization's goals.

Terminal Loss

The loss realized upon the sale or disposal of an asset at the end of its useful life.

UCC

Stands for Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.