In Auditing a Manufacturing Entity,which of the Following Procedures Would

question 32

Multiple Choice

In auditing a manufacturing entity,which of the following procedures would an auditor least likely perform to determine whether slow-moving,defective,and obsolete items included in inventory are properly identified?

• A)Examine inventory items for dust or rust during observation.
• B)Trace tag counts to final inventory listing.
• C)Compare inventory balances to anticipated sales volume.
• D)Review inventory experience and trends.

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Definitions:

Income Tax Purposes

The specific calculations and methods used to determine taxable income and tax liabilities according to the regulations set by tax authorities.

Pension Plan

A pension scheme in which an employer is obliged to contribute to a fund allocated for an employee's future benefit.

Plan Contribution

Money added to a retirement or pension plan, either by individuals or employers, to save for the future.

Actuarially Determined

Calculated using actuaries' methods and assumptions, typically in the context of pension plans and insurance.