In the inventory process,the auditor might perform the following analytical procedures
A)Compare inventory balances by category - raw material,work-in-process,and finished goods - for the current year with the prior year.
B)Compare inventory purchases by category - raw material,work-in-process,and finished goods - for the current year with the prior year.
C)Compute material margin with the current year with the prior year.Investigate any unexpected changes in the ratio.
D)Compute cost of goods sold with the current year with the prior year.Investigate any unexpected changes in the ratio.
E)Compute inventory turnover.Compare the current year's turnover to the prior year.Investigate any differences.
F)both A and C
G)both B and D
H)Both A and E

Question

Quizplus · Accepted Answer

Comparing inventory balances by category and computing inventory turnover are both common analytical procedures in the inventory process. These procedures can help the auditor identify any significant changes or discrepancies in the inventory and investigate them further. Comparing inventory purchases and computing margins and cost of goods sold are also important procedures, but they do not specifically relate to the inventory itself. Therefore, option H (both A and E) is the best choice.

In the Inventory Process,the Auditor Might Perform the Following Analytical