Observation of inventories is a required audit procedure under all circumstances.

Question

Quizplus · Accepted Answer

Observation of inventories is not always required under all circumstances. The necessity of inventory observation depends on the organization's size, industry, risk assessment, and other factors. Audit procedures are tailored based on these factors. It is possible for the auditor to obtain sufficient and appropriate audit evidence using alternate procedures such as test counts, analytical procedures, and reviews of stock records.

Observation of Inventories Is a Required Audit Procedure Under All