Question

The most reliable information an internal auditor can assess when determining an organization's legal title to inventories is?

1) Monthly gross profit and inventory levels.
2) Purchase orders.
3) Paid vendor invoices.
4) Records of inventories stored at off-site locations.

Answer 1

The most reliable information an internal auditor can assess when determining an organization's legal title to inventories is purchase orders, paid vendor invoices, and records of inventories stored at off-site locations.

Step-by-step explanation:

The most reliable information an internal auditor can assess when determining an organization's legal title to inventories is purchase orders, paid vendor invoices, and records of inventories stored at off-site locations.

Purchase orders provide evidence of the organization's intent to acquire the inventories and can help confirm ownership.

Paid vendor invoices show that the organization has fulfilled its financial obligations and can be used to establish ownership.

Records of inventories stored at off-site locations can be examined to verify the organization's control and possession of the inventories.