How Does the Auditor Gather Evidence During the Physical Inventory

question 33

Multiple Choice

How does the auditor gather evidence during the physical inventory count?

• A)The auditor determines that the items on hand that are not owned by the client are identified.
• B)The auditor begins the test count process after the client has finished counting the inventory.
• C)Management observes that all inventory has been tagged and counted.The auditor verifies that management has performed this practice.
• D)The auditor observes that client personnel are performing test counts in the areas where they are most familiar with the inventory.

---

Definitions:

Illegal Restraint

Actions or measures that unlawfully restrict freedom or movement, often referring to anticompetitive practices or personal liberties.

Public Policy

Government policies designed to address public issues and create laws that reflect the attitudes and beliefs of the general public.

Adhesion Contract

A standardized contract drafted by one party, usually the stronger party, where the weaker party has little to no ability to negotiate terms.

Take-It-Or-Leave-It BASIS

A take-it-or-leave-it basis refers to a situation where an offer is made with the understanding that no negotiation will be entertained, forcing the recipient to accept the offer in its entirety or reject it.