Final answer:
The audit procedure being described is Observation, which involves the auditor watching the entity's warehouse personnel as they count the raw materials inventory. This is distinct from inspecting the assets themselves, recalculating figures, or reperforming controls.
Step-by-step explanation:
When an auditor observes the entity's warehouse personnel counting the raw materials inventory, they are carrying out the audit procedure known as Observation. This procedure involves the auditor looking at a process or procedure being performed by others. In the context of an audit, observation is a valuable tool because it provides audit evidence about the existence of an asset and the entity’s controls over its assets.
Inspection of tangible assets is not the correct term in this context, as it involves the physical examination of the assets themselves rather than watching others count them. Recalculation refers to checking the mathematical accuracy of documents or records, while Reperformance involves the auditor independently executing procedures or controls that were originally performed as part of the entity's internal control.