Which One of the Following Procedures Would Not Be Appropriate

question 39

Multiple Choice

Which one of the following procedures would not be appropriate for an auditor in discharging his or her responsibilities concerning the client's physical inventories?

• A) Confirmation of goods in the hands of public warehouses.
• B) Supervising the annual physical inventory count.
• C) Carrying out physical inventory procedures at an interim date.
• D) Obtaining written representation from the client as to the existence, quality and dollar amount of the inventory.

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Definitions:

25-year Annuity

A financial product that provides a series of payments made at equal intervals over 25 years.

Compounded Semi-annually

A method of computing interest where the interest is calculated and added to the principal twice a year.

Periodic Interest Rate

The interest rate applied to a loan or investment over a specific period of time, less frequently than annually.

Compounded Monthly

The method of calculating interest where the accrued interest is added to the principal sum each month, leading to interest on interest the following month.