Final answer:
The most reliable evidence concerning the entity's assertion of rights and obligations related to inventories can be obtained through physical count of inventory and other procedures such as reviewing contracts and agreements.
Step-by-step explanation:
Auditing procedures provide evidence to support an entity's assertions about its financial statements. In the case of the entity's assertion of rights and obligations related to inventories, an auditor can perform a physical count of inventory, comparing it to the recorded amounts in the accounting records. This procedure provides reliable evidence by directly verifying the existence of the inventory and ensuring that the entity has legal ownership or the right to control the inventory.
Other audit procedures that could provide reliable evidence concerning the entity's assertion of rights and obligations related to inventories include reviewing contracts and agreements with suppliers and customers, examining invoices and purchase orders, and assessing the entity's internal controls over inventory management.