Which of the following is a condition which would not create a conducive situation for a client to take a physical inventory at an interim date before year-end?
A)The control risk over inventory is high.
B)The auditor will be able to review material transactions in the roll-forward period.
C)The auditor can effectively test the year-end balance through a combination of analytical procedures and selective testing of transactions between the physical count and the year-end.
D)The auditor reviews the intervening transactions for evidence of any manipulation or unusual activity.

Question

Quizplus · Accepted Answer

A high control risk over inventory would indicate that there is a risk of material misstatement in inventory and would not create a conducive situation for taking a physical inventory at an interim date before year-end. The other options suggest that the auditor can effectively review and test inventory, making it a conducive situation for taking a physical inventory at an interim date.

Which of the Following Is a Condition Which Would Not