When Auditors Observe the Client Counting Inventory, They Should Be

question 99

Multiple Choice

When auditors observe the client counting inventory, they should be careful to do all of the following except

• A) inquire about items that are likely to be obsolete or damaged.
• B) calculate the unit cost of the inventory items.
• C) discuss with management the reasons for excluding any material items.
• D) observe the counting of the most significant items.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.