To gain assurance that all inventory items in a client'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

Tracing the items listed in the inventory listing schedule to inventory tags and count sheets would provide assurance that all inventory items listed in the schedule are valid. This is because the inventory tags and count sheets are physical evidence that the items exist and have been counted, and therefore can be used to validate the accuracy of the inventory listing schedule. Option A is incorrect because tracing only the inventory tags noted during the auditor's observation may not provide a complete picture of all inventory items. Option B and D are incorrect because they focus on tracing items to receiving reports and vendors' invoices, which may not provide assurance that all inventory items listed in the client's inventory listing schedule are valid.

To Gain Assurance That All Inventory Items in a Client's