The auditor's tests of the adequacy of the physical controls over raw materials, work-in-process, and finished goods are usually restricted to:
A) observation and inquiry.
B) documentation and observation.
C) documentation and confirmation.
D) documentation and inquiry.

Question

Quizplus · Accepted Answer

The auditor's tests of physical controls are usually limited to observation and inquiry, where the auditor makes observations of the physical controls and inquires about their usage and effectiveness. While documentation and confirmation may be used in other audit procedures, they are not typically used in evaluating physical controls over inventory.

The Auditor's Tests of the Adequacy of the Physical Controls