When a physical count of inventory is performed at an interim date, the auditor observes it at that time and tests the perpetuals for transactions:
A) from the date of the count to year-end.
B) throughout the year.
C) which are a representative sample of the period under audit.
D) from the date of the count to the end of the audit field work.

Question

Quizplus · Accepted Answer

When a physical count of inventory is performed at an interim date, the auditor should observe it at that time and test the perpetuals for transactions from the date of the count to year-end. This is because the inventory balance at year-end is based on transactions from that interim date to year-end. Auditing the transactions from the date of the count to year-end helps ensure that the inventory balance at year-end is properly stated.

When a Physical Count of Inventory Is Performed at an Interim