All of the following are required by the auditor before allowing the client to take inventory before year-end except which one?
A)absence of "red flags".
B)internal control is weak.
C)the auditor can effectively test the year-end balance through a combination of analytical procedures and selective testing of transactions between the physical count and the year-end.
D)the auditor reviews the intervening transactions for evidence of any manipulation or unusual activity.

Question

Quizplus · Accepted Answer

Internal control being weak is actually a reason why the auditor would require physical inventory to be taken before year-end. The other options (absence of "red flags", effective testing through procedures and selective testing, and reviewing intervening transactions) are requirements for the auditor to allow the client to take inventory before year-end.

All of the Following Are Required by the Auditor Before