Question

The auditor is most likely to seek information from the plant manager with respect to the:

A. deferral or procurement of certain necessary insurance coverage.
B. appropriateness of physical inventory observation procedures.
C. adequacy of the provision for uncollectible accounts.
D. existence of obsolete machinery.

Answer 1

An auditor would consult the plant manager about the existence of obsolete machinery to assess potential financial statement impacts such as depreciation expenses or asset write-offs.

Step-by-step explanation:

The auditor is most likely to seek information from the plant manager with respect to the existence of obsolete machinery. The rationale behind this is that the plant manager is directly responsible for the day-to-day operations of the manufacturing facility and therefore would have the most current and accurate information regarding the machinery being utilized, its condition, and whether or not it's become obsolete. Additionally, the existence of obsolete machinery can significantly impact the financial statements and potentially lead to adjustments in depreciation expenses or write-offs, which are critical areas of concern for an auditor conducting a financial audit.