The Audit Procedure "Observe the Client Taking a Physical Inventory

question 59

Multiple Choice

The audit procedure "observe the client taking a physical inventory count and test the count" is sufficient to determine all of the following except:

• A) whether recorded inventory actually exists.
• B) whether recorded inventory was properly valued by the client.
• C) whether recorded inventory was properly counted by the client.
• D) whether client inventory instruction had properly been followed.

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Definitions:

Consumer Confidence

A measure of how optimistic or pessimistic consumers are regarding their expected financial situation, an indicator of the overall state of the economy.

Purchasing Power

The ability of an individual or group to buy goods and services, often related to their income and the price level of goods.

Sociocultural

Relating to or involving the social aspects and cultural dimensions of society and their impact on human behavior and interactions.

Demographics

The characteristics of human populations that can be used to identify consumer markets.