Which of the following is an example of the type of analytical procedures that an auditor would use for inventory?
A)Number of day's sales in receivables compared to industry averages.
B)Inventory turnover for the previous five years.
C)Days outstanding in accounts payable.
D)Salaries of marketing personnel as a percent of total inventory.

Question

Quizplus · Accepted Answer

Inventory turnover for the previous five years is a common analytical procedure used by auditors to assess the reasonableness of inventory balances. This involves comparing the inventory turnover ratio to industry averages and historical trends to identify any potential issues or inconsistencies. The other options listed are not related to inventory and would not provide relevant information for the audit of inventory.

Which of the Following Is an Example of the Type