How does the auditor gather evidence during the physical inventory count?
A)The auditor determines that the items on hand that are not owned by the client are counted.
B)The auditor performs test counts at the same time the client is counting the inventory.
C)Management observes that all inventory has been tagged and counted.The auditor verifies that management has performed this task.
D)The auditor observes that client personnel are performing test counts in the areas where they are most familiar with the inventory.

Question

Quizplus · Accepted Answer

The auditor performs test counts at the same time the client is counting the inventory. This allows the auditor to observe the counting procedures and gather evidence of the accuracy of the physical count. It also allows the auditor to identify any discrepancies and investigate further. The other options either do not involve the auditor directly gathering evidence or are not effective ways of obtaining evidence during the physical inventory count.

How Does the Auditor Gather Evidence During the Physical Inventory