The audit procedures used in an observation of the client's physical inventory taking are designed primarily to
A)test and observe the client's physical count of inventory.
B)verify independently the physical counts obtained by the client.
C)assist the client in taking test counts of year-end inventory.
D)determine whether inventory contains obsolete goods.

Question

Quizplus · Accepted Answer

The audit procedures used in an observation of the client's physical inventory taking are designed primarily to test and observe the client's physical count of inventory. This involves the auditor being present during the client's physical inventory count and performing procedures to ensure that the count is accurate and reliable. The auditor may also perform independent test counts to verify the client's count. The focus is on testing the accuracy and completeness of the physical count, rather than on determining whether inventory contains obsolete goods.

The Audit Procedures Used in an Observation of the Client's