Which statement is correct relating to the count of inventory when a company that specializes in taking such counts ("the company")is involved with counting a client's inventory?
A)The auditor should consider the company a specialist,and follow the procedures outlined for addressing an auditor's specialist.
B)The auditor should not consider the counts by the company,by themselves,sufficient appropriate audit evidence.
C)The auditor must observe all inventory counts taken by the company.
D)The auditor should observe a letter of representations form the company.

Question

Quizplus · Accepted Answer

The auditor should not solely rely on the counts by the company as sufficient appropriate audit evidence because the auditor is responsible for obtaining sufficient appropriate audit evidence to draw reasonable conclusions on which to base the auditor's opinion. This includes evaluating the methods and accuracy of the counts conducted by the company and possibly supplementing them with additional audit procedures.

Which Statement Is Correct Relating to the Count of Inventory