Which of the Following Is the Best Audit Procedure for the Discovery

question 12

Multiple Choice

Which of the following is the best audit procedure for the discovery of damaged merchandise in an entity's ending inventory?

• A)Compare the physical quantities of slow-moving items with corresponding quantities of the prior year.
• B)Observe the condition of merchandise and raw materials during the entity's physical inventory count.
• C)Review the management's inventory representation letter for accuracy.
• D)Test overall fairness of inventory values by comparing the company's turnover ratio with the industry average.

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Definitions:

Remuneration

Payment or compensation received for services rendered or work performed.

Terminate

To bring something to an end or conclude its operation.

Paraphrasing

The act of rewording a text or passage to express the same meaning in a different way, often to clarify or simplify.

Sender's Message

The information or content that an individual or entity intends to communicate to a recipient.