Observation of inventories is a required audit procedure whenever:
A) inventories are material.
B) inventories are material and it is practicable and reasonable.
C) it is practicable and reasonable.
D) the auditor considers it to be necessary.
E) inventories are material and the auditor considers it to be necessary.

Question

Quizplus · Accepted Answer

Observation of inventories is a required audit procedure when inventories are material to the financial statements and it is practicable and reasonable to do so. This ensures the auditor can verify the existence and condition of the inventory.

Observation of Inventories Is a Required Audit Procedure Whenever