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

By tracing items listed in the inventory listing schedule to inventory tags and count sheets, the auditor can ensure that all inventory items are valid and actually exist. This process confirms the accuracy and completeness of the inventory listing schedule. Option A relates only to items observed by the auditor and does not provide assurance for other items that may have been missed during observation. Option B is more focused on the completeness of the inventory records, rather than confirming the accuracy of the inventory listing schedule. Option D is also testing the completeness of the inventory records, but does not confirm the accuracy of the inventory listing schedule.

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