If an Auditor Were Concerned with Obtaining Evidence About the Appropriateness

question 102

Multiple Choice

If an auditor were concerned with obtaining evidence about the appropriateness of the value of inventory, which of the following tests would be most appropriate?

• A) compilation tests
• B) price tests
• C) confirmation of inventory held by outside parties
• D) physical examination of the inventory

---

Definitions:

Return on Investment

A measure used to evaluate the efficiency of an investment or to compare the efficiencies of several investments.

Divisional Performance Measure

Metrics or standards used to evaluate the efficiency, profitability, and productivity of a distinct segment or division within a larger company.

Divisional Managers

Individuals responsible for overseeing a specific division within a company, managing its operations, performance, and strategy.

Support Department Allocations

The costs of services provided by an internal support department and assigned to profit centers based on the usage of the service by each profit center.