Question

During the auditors' observation of the physical inventory, they often obtain information that may be used to test the cutoff of the client's purchase transactions.

A. True
B. False

Answer 1

The statement is true. Auditors use information obtained during the observation of physical inventory to test the cutoff of purchase transactions.

Step-by-step explanation:

The statement is True. During the auditors' observation of the physical inventory, they may obtain information that can be used to test the cutoff of the client's purchase transactions. This is done to ensure that the purchases made by the client are properly recorded in the correct accounting period.