The Timing of a Physical Count of Inventory Is Negotiated

question 11

Multiple Choice

The timing of a physical count of inventory is negotiated between the auditor and management. If the assessed level of control risk is high, an auditor would probably

• A) insist that the entity performs physical counts of inventory several times during the year.
• B) apply gross profit tests to ascertain the reasonableness of the physical counts.
• C) increase the extent of tests of control of the inventory cycle.
• D) request the entity to schedule the physical count at the end of the year.

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Definitions:

Sustainability Strategies

Approaches and practices designed to meet present needs without compromising the ability of future generations to meet their own needs, often focusing on environmental, economic, and social pillars.

Perception

The way in which something is regarded, understood, or interpreted by individuals.

Corporate Social Responsibility

The practice of companies taking responsibility for their impact on society and the environment, often beyond what is legally required.

Legislative Barriers

Legal or regulatory obstacles that affect how businesses operate, can limit market entry, or affect competition within industries.