If a Client Company Performs Its Physical Inventory Counts on a Date

question 40

Multiple Choice

If a client company performs its physical inventory counts on a date other than year-end, auditors must verify that:

• A) no shrinkage results.
• B) there are no discrepancies between accounting records and goods on hand as of the date of the physical count.
• C) the count data is rolled forward or rolled back to the financial statements based on transaction data between the dates of the physical count and year-end.
• D) authorization controls applied during the period were sufficient to prevent losses between the dates of the physical count and year-end.

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Definitions:

Trade Protection

Policies or actions taken by a government to protect its domestic industries from foreign competition.

National Security

The protection and preservation of a nation's people, economy, and institutions from external and internal threats.

National Security

The policies and measures that a nation undertakes to protect its citizens, economy, and institutions against external threats or aggression.

Tariffs

Taxes imposed on imported goods, often to protect domestic industries.