ICAEW ARF · Chapter 8 · Question 10 of 12
Which of the following is NOT the auditor's responsibility when attending a client's inventory count?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Counting all of the inventory and preparing the count sheets for the client
Explanation
Management is responsible for counting the inventory and preparing the count records. The auditor attends to observe the count, perform test counts, gather cut-off information and note damaged or obsolete items. If the auditor performed the count, this would create a self-review threat and confuse responsibilities.
More Audit procedures and substantive testing MCQs
- Q12A company's year end is 31 December. Its last electricity bill covered the period up to 31 October. The next quarterly bill, received in…
- Q1An auditor watches the client's staff carrying out the year-end inventory count. What type of audit procedure is this?
- Q2An auditor independently prepares the client's year-end bank reconciliation to check that the client's control has operated correctly…
- Q3Which of the following describes a positive confirmation request for trade receivables?
- Q4A customer does not reply to a positive confirmation request for its year-end balance, even after a follow-up. Which alternative procedure…