Question

The auditors' observation of the taking of a client's physical inventory must be done on, or shortly after the balance sheet date.

A. True
B. False

Answer 1

The auditors' observation of the taking of a client's physical inventory must be done on, or shortly after the balance sheet date.

Step-by-step explanation:

The auditors' observation of the taking of a client's physical inventory must be done on, or shortly after the balance sheet date. This statement is True. Auditors typically observe the physical inventory count to ensure its accuracy and existence. Doing so on or shortly after the balance sheet date ensures that the inventory balance as reported on the balance sheet is reliable and reflects the actual physical inventory at that specific point in time.