Preparing for an Inventory Observation in the Audit of Inventory

question 71

Essay

Preparing for an inventory observation In the audit of inventory the auditor must perform important procedures prior to the actual observation.Identify the steps the auditor must take prior to the day the inventory is actually counted.

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Definitions:

Increase

An upward movement in quantity, size, value, or some other measure, indicating growth or escalation.

Local Market

A market in which goods and services are bought and sold within a specific geographic area, often reflecting the preferences and characteristics of the local population.

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing and able to supply at various prices.

Commodity Increases

Refers to a rise in the quantity supplied or demanded of a good or service, often due to factors like price changes, improvements in technology, or shifts in consumer preferences.