ICAEW ARF · Chapter 8 · Question 1 of 12
An auditor watches the client's staff carrying out the year-end inventory count. What type of audit procedure is this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Observation
Explanation
Observation consists of looking at a process or procedure being performed by others, such as watching the inventory count. Inspection involves examining records, documents or physical assets, inquiry involves seeking information from people, and reperformance involves the auditor independently carrying out a control.
More Audit procedures and substantive testing MCQs
- 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…
- Q5Last year a client's total wages cost was £1,200,000 for an average of 40 employees. This year the average number of employees is 44 and…
- Q6Which procedure provides the best evidence about the completeness of trade payables?
- Q7Which of the following is correct about a bank confirmation request for audit purposes?