Evaluate the importance of observation of inventory


Response to the following problem:

Before the physical examination, the auditor obtains a copy of the client's inventory instructions and reviews them with the controller. In obtaining an understanding of inventory procedures for a small manufacturing company, these deficiencies are identified: Shipping operations will not be completely halted during the physical examination, and there will be no independent verification of the original inventory count by a second counting team. Evaluate the importance of each of these deficiencies and state its effect on the auditor's observation of inventory.

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Auditing: Evaluate the importance of observation of inventory
Reference No:- TGS02128243

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