To gain assurance that all inventory items in an entity's inventory listing schedule are valid, an auditor most likely would trace:
A)inventory tags noted during the auditor's observation to items listed in the inventory listing schedule.
B)inventory tags noted during the auditor's observation to items listed in receiving reports and vendors' invoices.
C)items listed in the inventory listing schedule to inventory tags and the count sheets.
D)items listed in receiving reports and vendors' invoices to the inventory listing schedule.

Question

Quizplus · Accepted Answer

To gain assurance that all inventory items in an entity's inventory listing schedule are valid, an auditor should trace the items listed in the inventory listing schedule to inventory tags and count sheets. This ensures that all items listed in the schedule actually exist, and the count sheets reflect accurate count of those items. Tracing inventory tags to items listed in the inventory listing schedule or receiving reports and vendors' invoices would not provide the same level of assurance.

To Gain Assurance That All Inventory Items in an Entity's