The Auditor's Objective During an Observation of a Client's Physical

question 71

Multiple Choice

The auditor's objective during an observation of a client's physical inventory count is to:

• A) discover whether a client has counted a particular inventory item or group of items.
• B) obtain direct knowledge that the inventory exists and has been properly counted.
• C) provide an appraisal of the quality of the merchandise on hand on the day of the physical count.
• D) allow the auditor to supervise the conduct of the count so as to obtain assurance that inventory quantities are reasonably accurate.

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Definitions:

Reverse Causality

A situation where a supposed cause is actually the effect and vice versa.

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The regularity or rate at which a public or private service is offered or performed, often measured within a certain time frame.

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