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 client to schedule the physical inventory count at the end of the year.
B) Insist that the client 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

Weak internal control over inventory means that there is a risk of errors or fraud in the perpetual inventory records. The auditor would want the client to schedule a physical inventory count at the end of the year to verify the accuracy of the records and ensure that the inventory balance in the financial statements is reliable. This is a normal audit procedure when the internal control over inventory is weak. The other options are not relevant in this situation.

When Perpetual Inventory Records Are Maintained in Quantities and in Dollars