Exam 21: Audit of the Inventory and Warehousing Cycle

The auditor traces inventory tags identified as non-owned during the physical observation to the inventory listing schedule to make sure these have not been included.This test satisfies the balance-related audit objective of

If a client intends to count inventory at an interim date,the auditor should expect there to be all of the following except

Which of the following statements is correct regarding the auditor's responsibility with respect to the year-end inventory procedures of an audit client?

When there are no perpetual inventory files and inventory is material,

Which of the following statements is correct regarding the audit of inventory cost accounting?

Discuss the four aspects of the audit of cost accounting with which the auditor is most concerned.

The physical counting of inventory may be performed at which of the following times?

Controls which provide a means of ensuring that the physical counts are properly summarized,priced at the same amount as the unit records,correctly extended and totaled,and included in the general ledger at the proper amount are known as

A common source of business risk for inventory is the reliance on a few key suppliers.

The auditor is concerned with four aspects of cost accounting,including

Inventory is a complex area to audit for all except which of the following reasons?

When auditing inventory cost accounting,the auditor is concerned with all of the following except for

Which of the following is a significant audit concern related to the transfer of inventory from one location to another?

When part of the client's inventory is in a public warehouse or in the possession of other outside custodians,the auditor does not need to observe a physical count of the inventory if a written confirmation is obtained directly from the inventory custodians.

When an auditor observes that personnel who are responsible for physically counting inventory are not following the inventory instructions,the auditor should

Which one of the following substantive analytical procedures would be most useful in alerting the auditor to the possibility of obsolete inventory?

In process cost systems,costs are accumulated by individual jobs.

If an auditor were concerned with obtaining evidence about the appropriateness of the value of inventory,which of the following tests would be most appropriate?

Comparing the physical counts with the perpetual inventory master files satisfies the balance-related audit objective of

________ accumulate costs by individual jobs as material is issued into production and labor costs are incurred.