To Obtain Assurance That All Inventory Items in a Client's

question 472

Multiple Choice

To obtain assurance that all inventory items in a client's inventory listing are valid, an auditor most likely would trace:

• A) Inventory tags noted during the auditor's observation to items listed in receiving reports and vendors' invoices.
• B) Items listed in receiving reports and vendors' invoices to the inventory listing.
• C) Inventory tags noted during the auditor's observation to items in the inventory listing.
• D) Items in the inventory listing to inventory tags and the auditor's recorded count sheets.

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Definitions:

Partner

An individual or entity involved in a business enterprise with one or more other partners, sharing in the profits and losses of the business.

Agency Parties

Individuals or entities that enter into an agency relationship where one party (the agent) agrees to act on behalf of another party (the principal).

Beneficiary

An individual or entity entitled to receive benefits or proceeds from an insurance policy, trust, or will.

Third Party

An individual or group besides the two involved in a transaction or legal case.