You are gathering evidence for the audit objective that existing inventory items are included in the inventory listing schedule. The audit procedure that would provide you with the best evidence to confirm this objective is
A) trace from inventory tags to the inventory listing schedule and make sure the inventory on the tags is included.
B) trace the inventory totals to the general ledger.
C) perform tests of lower-of-cost-or-market.
D) account for unused tags shown in the auditor's documentation to make sure no tags have been added.

Question

Quizplus · Accepted Answer

Tracing from inventory tags to the inventory listing schedule ensures that items physically present in the inventory are recorded accurately in the inventory records. This provides the best evidence to confirm that existing inventory items are included in the inventory listing schedule. Tracing inventory totals to the general ledger or performing tests of lower-of-cost-or-market are not directly relevant to this audit objective. Accounting for unused tags only confirms that no tags have been added, but it does not provide evidence of whether existing inventory items are included in the inventory listing schedule.

You Are Gathering Evidence for the Audit Objective That Existing