From Which of the Following Evidence-Gathering Audit Procedures Would an Auditor

question 92

Multiple Choice

From which of the following evidence-gathering audit procedures would an auditor obtain most assurance concerning the existence of inventories?

• A)Observation of physical inventory counts
• B)Written inventory representations from management
• C)Confirmation of inventories in a public warehouse
• D)Auditor's recomputation of inventory extensions

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Definitions:

Option To Wait

A choice or right, but not the obligation, to delay a business decision or investment, recognizing the value of flexibility in decision-making under uncertain conditions.

Discount Rate

The interest rate used to discount future cash flows to their present values, providing a measure of the time value of money.

Cash Inflows

Money that enters a business from various sources, contributing to its revenue or capital.

Required Rate

The minimum expected rate of return on an investment, setting a benchmark for acceptable investment performance.