Observation involves an auditor:
A)watching a procedure being carried out by another party
B)asking questions to gain an understanding of various matters throughout the audit
C)redoing processes conducted by the client
D)checking the mathematical accuracy of client records

Question

Quizplus · Accepted Answer

Observation involves an auditor watching a procedure being carried out by another party, such as observing the processing of transactions or the counting of inventory. This helps the auditor to gain an understanding of the client's processes and to test the effectiveness of internal controls. Asking questions, redoing processes, and checking mathematical accuracy are other audit procedures that are different from observation.

Observation Involves an Auditor