In the event that the audit client has multiple locations and the auditor is not able to be present at all of them on the date of the physical inventory count, the auditor can rely
A) totally on the internal auditor to observe the physical inventory count.
B) on the internal auditor subject to the requirements of CAS 610.
C) totally on the records prepared as part of the client periodic inventory system.
D) none of the above

Question

Quizplus · Accepted Answer

CAS 610 outlines the requirements and responsibilities regarding the use of internal auditors in external audits. If the auditor is unable to be present at all locations for the physical inventory count, they can rely on the internal auditor, subject to the requirements of CAS 610. This means that the auditor must evaluate the competence, objectivity, and work performed by the internal auditor and perform additional testing as necessary to obtain sufficient evidence. Relying solely on the internal auditor without following these requirements would not be sufficient. Relying entirely on the client's periodic inventory system records would not provide enough reliable evidence to support the physical inventory count.

In the Event That the Audit Client Has Multiple Locations