Which of the following is true about the auditors' observation of the client's physical inventory?
A)The count must be made at year-end.
B)The auditors should supervise the client's personnel.
C)The auditors' observation addresses the existence assertion.
D)The auditors should justify any omission of the observation in the audit report.

Question

Quizplus · Accepted Answer

The observation of the client's physical inventory addresses the existence assertion, which means that the auditors are verifying if the inventory actually exists and is physically present at the client's location. The other options are incorrect as the inventory count can be made at a date other than year-end, the auditors should not supervise the client's personnel, and there is no requirement to justify the omission of the observation in the audit report.

Which of the Following Is True About the Auditors' Observation