Observation of inventory counts is a required audit procedure whenever:
A) inventories are material.
B) it is practicable to do so.
C) inventories are material and it is practicable to do so.
D) inventories are material and the auditor considers it to be necessary.

Question

Quizplus · Accepted Answer

Observation of inventory counts is a required audit procedure when inventories are material to the financial statements and it is practicable to do so. This ensures the auditor can verify the existence and condition of the inventory, which is crucial for accurate financial reporting.

Observation of Inventory Counts Is a Required Audit Procedure Whenever