Final answer:
Auditors would have the least concern about the existence of inventory in a service-based company like a hotel.
Step-by-step explanation:
When considering the existence of inventory, auditors generally have the least concern about companies that provide services rather than physical goods. In this case, a hotel falls under the category of a service-based company, as it provides accommodation and related services to customers. Unlike manufacturing or retail companies that have physical inventory, a hotel's inventory mainly consists of perishable items such as food and beverages.
Since a hotel's inventory is not as extensive or diverse as a manufacturing or retail company, the auditor's concern about its existence is relatively low. The hotel's inventory is visible and easily verifiable through physical counts, invoices, and other records. Additionally, a hotel can closely monitor and control its inventory levels, making it less susceptible to fraud or mismanagement.
Furthermore, a hotel's inventory turnover is high, meaning it quickly sells or replenishes its inventory. This reduces the risk of obsolete or expired inventory. Therefore, compared to companies in other industries, such as manufacturing or retail, a hotel is likely to have the least concern about the existence of inventory from an auditor's perspective.