The auditors will usually trace the details of the test counts made during the observation of the physical inventory taking to a final inventory schedule. This audit procedure is undertaken to provide evidence that items physically present and observed by the auditors at the time of the physical inventory count are:Select one:a.owned by the clientb.not obsoletec.physically present at the time of the preparation of the final inventory schedule.d.included in the final inventory schedule

An audit program for inventory includes the following procedure:“Test count a sample of physical inventory and agree to management’s count records.”"Observe the arrangements of the client's management before the inventory count."&nbsp;"Select goods received notes for a few days before the count date and confirm that they are recorded and existed as "goods in" in inventory records. The corresponding goods should be included in the purchase in trade payables.""Obtain written representations concerning the completeness and accuracy of the physical count and valuation."Which of the above procedure is not included at the time of attending the physical stock take.<br /> A. a. 2 <br />B. b. 4 <br />C. c. 3 <br />D. d. 1

If inventory is material to the financial statements, the auditor must obtain sufficient, appropriate audit evidence regarding the existence and condition of inventory by attending the physical inventory counting, unless impracticable.In which of the following situations would it be considered impracticable for an auditor to attend physical inventory counting?When there is insufficient audit time availableWhen inventory is held at a remote location far distant from the auditor’s premisesWhen the financial cost of attending the count would exceed the benefit<br /> A. a. none of these <br />B. b. 2 only <br />C. c. 1, 2 and 3 <br />D. d. 1 and 3 

After accounting for a sequence of inventory tags, an auditor traces a sample of tags to the physical inventory listing to obtain evidence that all items:Select one:a.included in the listing have been counted.b.included in the listing are represented by inventory tags.c.represented by inventory tags are bona fide.d.represented by inventory tags are included in the listing.

You are the auditor of Homecontrols, a company which manufactures components for domestic appliances. It operates a perpetual inventory system and performs quarterly physical inventory counts, amending the perpetual inventory records to reflect actual quantities counted.During your interim visit, you review the results of the last physical count. Several high-value items included in the records were not in inventory. Also, returns from customers were added to physical inventory but are not recorded in the perpetual inventory records.Required:Draft, for inclusion in a report to management, the identified deficiencies, possible implications and recommendations to address them.

In a manufacturing company, which one of the following audit procedures would give the least assurance of the valuation of inventory at the audit date?Select one:a.Testing the computation of standard overhead ratesb.Examining paid vendors' invoices.c.Reviewing direct labor rates.d.Obtaining confirmation of inventories pledged under loan agreements