Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder

Exercise 27

Which of the following audit procedures would probably provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventory?
A) Tracing of test counts noted during the entity's physical count to the entity's summarization of quantities.
B) Inquiry of management to determine whether there are significant purchase commitments that should be considered for disclosure.
C) Selection of the last few shipping advices used before the physical count and determination of whether the shipments were recorded as sales.
D) During physical observation of inventory verify that "bill-and-hold" inventory is segregated and not included in the ending inventory count.