The costs used to value the physical inventory must be tested to determine whether the client has correctly followed an inventory method that is in accordance with accounting standards and is consistent with previous years.The audit procedures used to verify these costs are referred to as:
A) price tests.
B) cost tests.
C) compilation tests.
D) consistency tests.

Question

Quizplus · Accepted Answer

Price tests are audit procedures used to verify the accuracy of the costs assigned to inventory items, ensuring they reflect the actual purchase price or manufacturing cost in accordance with accounting standards and consistency with prior periods.

The Costs Used to Value the Physical Inventory Must Be