Final answer:
An auditor must check the client's inventory records against physical counts, verify consistent application of the chosen inventory pricing method such as FIFO, and confirm accurate calculation and reflection of inventory costs in financial statements.
Step-by-step explanation:
To determine that a client has consistently and accurately applied an inventory pricing method, such as FIFO (First-In, First-Out), the auditor should examine the client's inventory records and compare them to the physical inventory counts. The auditor should review the methods the client uses for inventory valuation and ensure that these methods are applied consistently each year. Consistent application refers to using the same accounting principles, methods, practices, and procedures from one period to the next.
Furthermore, the auditor should verify the calculations of inventory costs and make sure that the financial statements reflect these calculations according to the method chosen by the client. In case of FIFO, they should verify that the oldest inventory costs are being recorded as the cost of goods sold first. Additionally, auditors may perform inventory cutoff procedures to ensure that transactions near the end of the accounting period are recorded in the correct period.