Physical Inventory Count – NBC Institute

AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

Question

ISA 501: Audit Evidence – Additional considerations for specific items requires that, if inventory is material to the financial statements, the auditor should obtain sufficient appropriate audit evidence by, among others, being present at physical inventory counting unless impractical. The Managing Director of MLT Ltd is at a loss as to why in this age of technological advancement, auditors insist on being present during physical inventory count.

Required:
i) Explain FOUR (4) reasons for conducting physical inventory counts.
ii) Discuss the responsibilities of Management and Auditors with respect to physical inventory counts.

Answer

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Tags: Auditor Responsibilities, Inventory Management, ISA 501, Management responsibilities, Physical Inventory Count
Level: Level 2

Topic: Audit and Assurance Evidence
Series: DEC 2022

Question Tag: Physical Inventory Count

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AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

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AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

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AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

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