Question

Assume that the auditor of an organization is concerned about the operation of the control in question 3 as it related to the existence of goods being received. Which of the following would the auditor be least likely to use in its tests over this control?

a. confirmations sent to vendors with whom the organization has done business during the past fiscal year
b. inquiry of warehouse supervisory personnel to obtain an overview of the organization's process for receiving goods
c. observation of warehouse personnel during normal receiving operations
d. vouching vendor invoices back to receiving reports and purchase orders

Answer 1

An auditor concerned about the operation of controls related to the existence of goods being received is least likely to use confirmations sent to vendors, instead of relying on inquiries, observations, and vouching related documents.

Step-by-step explanation:

The question revolves around the tests an auditor would perform to gain assurance over the existence of goods received by an organization. The audit procedure the auditor would be least likely to use is a. confirmations sent to vendors with whom the organization has done business during the past fiscal year. This is because confirmations are typically used for verifying the existence of accounts payable balances, not the physical existence of inventory. Instead, the auditor would more likely rely on the inquiry of warehouse supervisory personnel, observation of warehouse personnel during normal receiving operations and vouching vendor invoices back to receiving reports and purchase orders to gain assurance over the control in question.