When inventory is material, SA 501 requires the auditor to attend the physical inventory count, unless impracticable, in order to:

Correct answer: D) Evaluate management's instructions, observe the count procedures, inspect the inventory and perform test counts

Explanation

SA 501 requires attendance at physical inventory counting to evaluate management's instructions and procedures, observe their performance, inspect the inventory and perform test counts. The count remains management's responsibility. The count can be at a date other than the year-end, with procedures to cover movements in between.