Which items should auditors select when testing inventory for pricing?
A) high-priced items
B) items with stable prices
C) representative items
D) both A and C

Question

Quizplus · Accepted Answer

High-priced items are chosen to ensure that the valuation of such items is correct, whereas representative items are selected to provide a cross-section of all goods held within inventory. By selecting a combination of high-priced and representative items, the auditor can ensure that pricing is accurate across inventory as a whole. Items with stable prices are not necessarily better to select as the auditor needs to obtain sufficient audit evidence to support inventory values - therefore, a mix of fluctuating and stable prices should be chosen if they are representative of the inventory as a whole.

Which Items Should Auditors Select When Testing Inventory for Pricing