Thursday 22 November 2012

In auditing inventories, a major objective relates to the existence assertion. Of the following audit procedures relating to inventories, which does not support the existence assertion? • The auditor reviews the client’s inventory taking instructions for matters such as proper arrangement of goods, separation of consigned goods, and limits on movements of goods during inventory. • The auditor confirms inventories not on the premises. • The auditor performs a lower of cost or market test for major categories of inventory. • The auditor observes the client’s inventory and performs test counts as appropriate.

In auditing inventories, a major objective relates to the existence assertion. Of the following audit procedures relating to inventories, which does not support the existence assertion?

·        The auditor reviews the client’s inventory taking instructions for matters such as proper arrangement of goods, separation of consigned goods, and limits on movements of goods during inventory.

·        The auditor confirms inventories not on the premises.

·        The auditor performs a lower of cost or market test for major categories of inventory.

·        The auditor observes the client’s inventory and performs test counts as appropriate.



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