For the purpose of determining proper cutoff for inventory, the auditor will select a sample from which of the following for a few days before and after year-end?
A)Materials requisitions.
B)Production schedules.
C)Receiving documents.
D)Purchase orders.

Question

Quizplus · Accepted Answer

The auditor will select a sample from receiving documents to determine proper cutoff for inventory. These documents provide evidence of when goods were received and are important in ensuring that transactions are recorded in the proper accounting period. Selecting documents from a few days before and after year-end will allow the auditor to test the completeness and accuracy of inventory amounts recorded on the balance sheet. Materials requisitions and production schedules are more useful in testing the accuracy of inventory quantities, while purchase orders are used to verify the validity of inventory transactions.

For the Purpose of Determining Proper Cutoff for Inventory, the Auditor