When Performing Price Tests for Purchased Inventory,the Auditor Would Not
When performing price tests for purchased inventory,the auditor would not be concerned with the most recent vendors' invoices if the client uses the FIFO valuation method.
When a client has standard cost records,an efficient and useful method of determining valuation is to review and analyze variances.
The major concerns in performing inventory valuation tests are compliance with GAAP and consistency with prior years.
The audit procedure "Foot the inventory listing schedules for raw materials,work-in-process,and finished goods" provides assurance mainly for the accuracy objective for inventory pricing and compilation.