You Are Gathering Evidence for the Audit Objective That Existing

question 137

Multiple Choice

You are gathering evidence for the audit objective that existing inventory items are included in the inventory listing schedule. The audit procedure that would provide you with the best evidence to confirm this objective is

• A) trace from inventory tags to the inventory listing schedule and make sure the inventory on the tags is included.
• B) trace the inventory totals to the general ledger.
• C) perform tests of lower-of-cost-or-market.
• D) account for unused tags shown in the auditor's documentation to make sure no tags have been added.

---

Definitions:

Exchange Rate Fluctuations

Variations in the value of one currency in relation to another, affecting the relative price of goods and services between countries and impacting international trade and investments.

Currency Hedge

A financial strategy used to minimize or manage the risks associated with changes in currency exchange rates affecting investments or transactions.

Exchange Rate

The price of one currency in terms of another currency, used for converting one currency into another.

Revenues And Expenses

Terms referring to the income generated from business activities and the costs incurred to earn that income, respectively.