An auditor must inquire about consigned or customer inventory included on the client's premises to satisfy the balance-related audit objective of
A) cutoff.
B) classification.
C) rights.
D) completeness.

Question

Quizplus · Accepted Answer

The balance-related audit objective of rights pertains to verifying that the company has legal ownership of the inventory, which includes ensuring that any consigned or customer inventory is properly accounted for. Therefore, an auditor must inquire about consigned or customer inventory included on the client's premises to satisfy the rights objective.

An Auditor Must Inquire About Consigned or Customer Inventory Included