An example of physical examination is the auditor's testing of inventory by counting it to substantiate the existence assertion.

Name: An example of physical examination is the auditor's testing of inventory by counting it to substantiate the existence assertion.
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A physical examination involves the direct observation or measurement of an asset or liability. Counting inventory is an example of a physical examination as it involves the auditor physically verifying the existence of the inventory.

An Example of Physical Examination Is the Auditor's Testing of Inventory