In Obtaining an Understanding of a Manufacturing Entity's Internal Control

question 44

Multiple Choice

In obtaining an understanding of a manufacturing entity's internal control concerning inventory balances, an auditor most likely would:

• A)review the entity's description of inventory policies and procedures.
• B)perform test counts of inventory during the entity's physical count.
• C)analyze inventory turnover statistics to identify slow-moving and obsolete items.
• D)analyze monthly production reports to identify variances and unusual transactions.

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Definitions:

William H. Seward

An American politician who served as the United States Secretary of State under Presidents Abraham Lincoln and Andrew Johnson, remembered for his purchase of Alaska.

American Empire

Refers to the United States' expansion and exertion of economic, military, and cultural influence around the world.

Natural Process

A sequence of events or phenomena occurring in the natural world, governed by the laws of nature without human intervention.

Economic Expansion

A phase of the business cycle where economic activity and output grow, marked by increases in employment, consumer spending, and production.