When perpetual inventory records are maintained in quantities and in dollars and internal control over inventory is weak, the auditor would probably
A) Want the entity to schedule the physical inventory count at the end of the year.
B) Insist that the entity perform physical counts of inventory items several times during the year.
C) Increase the extent of tests for unrecorded liabilities at the end of the year.
D) Have to disclaim an opinion on the income statement for that year.

Question

Quizplus · Accepted Answer

Since internal control over inventory is weak, the auditor would want the entity to schedule the physical inventory count at the end of the year to ensure that the quantities and dollar amounts in the perpetual inventory records are accurate. This will also help the auditor in verifying the existence and completeness of the inventory.

When Perpetual Inventory Records Are Maintained in Quantities and in Dollars