An auditor selects a random sampling of tag numbers and identifies the tag with that number attached to the actual inventory.The purpose of the procedure is to:
A)obtain proper cutoff information.
B)uncover the inclusion of nonexistent items as inventory.
C)to determine if the client has adequately priced the inventory item.
D)to verify that the client has not changed the recorded counts after the auditor left the premises.

Question

Quizplus · Accepted Answer

The purpose of this procedure is to uncover the inclusion of nonexistent items as inventory by verifying that the tag numbers selected match with the actual inventory present. This helps in identifying any fraud or errors in inventory management. It is not related to obtaining proper cutoff information, pricing inventory items, or verifying changes in recorded counts.

An Auditor Selects a Random Sampling of Tag Numbers and Identifies