Analytical procedures can help an auditor assess the reasonableness of the inventory balances by highlighting changes that:
A) suggest slow-moving inventory for possible obsolescence.
B) address whether inventory includes operating costs that should be expensed rather than capitalized.
C) compare the reasonableness of inventory balances with purchases and cost of goods sold.
D) All of the above.

Question

Quizplus · Accepted Answer

Analytical procedures can help the auditor assess the reasonableness of inventory balances by highlighting changes in slow-moving inventory that may indicate possible obsolescence, determining if inventory includes operating costs that should be expensed rather than capitalized, and comparing the reasonableness of inventory balances with purchases and cost of goods sold. Therefore, all of the options presented are correct.

Analytical Procedures Can Help an Auditor Assess the Reasonableness of the Inventory