Question

Which one of the following procedures would not be appropriate for the auditors in discharging their responsibilities concerning the client's physical inventories?

A) Confirmation of goods in the hands of public warehouses
B) Supervising the taking of the annual physical inventory
C) Carrying out physical inventory procedures at an interim date
D) Obtaining written representation from the client as to the existence, quality, and dollar amount of the inventory

Answer 1

(B) Supervising the taking of the annual physical inventory is not appropriate for auditors, as it is a management responsibility and auditors should maintain their independence.

Step-by-step explanation:

The question pertains to the appropriate responsibilities of auditors regarding a client's physical inventory. Among the procedures presented, supervising the taking of the annual physical inventory would not be appropriate for auditors in discharging their responsibilities.

While auditors are responsible for observing inventory counts to gather evidence regarding inventory quantities, they do not typically supervise these counts.

Supervision of inventory is a management responsibility. Instead, auditors will confirm goods in public warehouses, perform inventory procedures at an interim date, and obtain written representations from the client but would refrain from supervising the inventory process itself to maintain their independence.