Which Is the BEST Audit Procedure for the Discovery of Damaged

question 123

Multiple Choice

Which is the BEST audit procedure for the discovery of damaged merchandise?

• A) Review the management's inventory representation letter for accuracy.
• B) Be alert for items that are located in inappropriate places while observing the client's physical inventory count.
• C) Test overall fairness of inventory values by comparing the company's turnover ratio with the industry average.
• D) Compare the physical quantities of slow-moving items with corresponding quantities of the prior year.

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Definitions:

Cued Recall

A memory recall process where prompts are given to aid the retrieval of information.

Savings

The portion of income not spent on consumption but reserved for future use; in psychology, it also refers to the reduction in time or effort to relearn a previously learned task.

Sequentially

In a sequential order or manner, where events, processes, or items follow one after another in a logical sequence.

Suspects

Individuals believed to possibly be involved in committing a crime or wrongdoing, but not yet proven guilty.