Author Question: When there are no perpetual inventory files and inventory is material, (Read 11 times)

Aimless0988 · **on:** Aug 21, 2022

Question 1

When may auditors observe the physical inventory count?
◦

At an interim date	At year-end
Yes	Yes

◦

At an interim date	At year-end
No	No

◦

At an interim date	At year-end
Yes	No

◦

At an interim date	At year-end
No	Yes

Question 2

When there are no perpetual inventory files and inventory is material,
◦ an audit cannot be performed, so the auditor must issue a disclaimer.
◦ a physical inventory should be taken by the client near the end of the accounting period.
◦ the auditor will have to perform the inventory count and determine valuation.
◦ the auditor need not observe inventory counts but must do test counts.

furthoh · **Reply #1 on:** Aug 21, 2022

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