The Goren Company counts its inventory on October 31, 20X8. As a senior auditor assigned to the engagement, you observe the inventory count on this date. During the inventory observation, you encounter only minor problems, which are cleared up, to your satisfaction. On November 15, 20X8, the controller for the Goren Company informs you that the inventory summary sheets are complete and gives you a copy, part of which is reproduced here:

\begin{array} { r l c c r } \begin{array} { c } \text { Tag } \\\text { Number }\end{array} & { \text { Description } } & \text { Quantity } & \text { Price } ( \$ ) & \begin{array} { r } \text { Extended } \\\text { Value }\end{array} \\2683 & \text { Metal clips, X104 } & 768 & \$ 1.50 \text { each } & \$ 1,052 \\1888 & \text { Metal strips, 8" } & 1,264 \text { feet } & 0.50 \text { per foot } & 632 \\4822 & \text { Pipe, } 3 ^ { \prime \prime } & 852 \text { feet } & 6.00 \text { per yard } & 1,704 \\43 & \text { Heavy-duty clamps, No. } 4 & 376 & 1.00 \text { each } & 376 \\561 & \text { Heavy-duty pump, } 3 ^ { \prime \prime } & 178 & 4.50 \text { each } & 801 \\2184 & \text { Metal struts, 6" } & 125 & 1.20 \text { each } & 150 \\3421 & \text { Corner braces, No. 107 } & 52 \text { boxes } & 25.00 \text { per box } & 1,300 \\1746 & \text { Rubber inner facing } & \text { 26 dozen } & 15.00 \text { each } & 4,680\end{array}

During the inventory observation, you recorded the following inventory tag control information in your working papers: $The Goren Company counts its inventory on October 31, 20X8. As a senior auditor assigned to the engagement, you observe the inventory count on this date. During the inventory observation, you encounter only minor problems, which are cleared up, to your satisfaction. On November 15, 20X8, the controller for the Goren Company informs you that the inventory summary sheets are complete and gives you a copy, part of which is reproduced here: \begin{array} { r l c c r } \begin{array} { c } \text { Tag } \\ \text { Number } \end{array} & { \text { Description } } & \text { Quantity } & \text { Price } ( \$ ) & \begin{array} { r } \text { Extended } \\ \text { Value } \end{array} \\ 2683 & \text { Metal clips, X104 } & 768 & \$ 1.50 \text { each } & \$ 1,052 \\ 1888 & \text { Metal strips, 8 } & 1,264 \text { feet } & 0.50 \text { per foot } & 632 \\ 4822 & \text { Pipe, } 3 ^ { \prime \prime } & 852 \text { feet } & 6.00 \text { per yard } & 1,704 \\ 43 & \text { Heavy-duty clamps, No. } 4 & 376 & 1.00 \text { each } & 376 \\ 561 & \text { Heavy-duty pump, } 3 ^ { \prime \prime } & 178 & 4.50 \text { each } & 801 \\ 2184 & \text { Metal struts, 6 } & 125 & 1.20 \text { each } & 150 \\ 3421 & \text { Corner braces, No. 107 } & 52 \text { boxes } & 25.00 \text { per box } & 1,300 \\ 1746 & \text { Rubber inner facing } & \text { 26 dozen } & 15.00 \text { each } & 4,680 \end{array} During the inventory observation, you recorded the following inventory tag control information in your working papers: During the inventory observation, you recorded the following test counts in your working papers: REQUIRED: List the tag numbers identified above on your answer sheet. If you believe the information pertaining to the tag number is correct, so state. If you believe the information is incorrect, describe the error. The information you recorded during your test counts, of course, was 100 \% accurate.$

During the inventory observation, you recorded the following test counts in your working papers:

$The Goren Company counts its inventory on October 31, 20X8. As a senior auditor assigned to the engagement, you observe the inventory count on this date. During the inventory observation, you encounter only minor problems, which are cleared up, to your satisfaction. On November 15, 20X8, the controller for the Goren Company informs you that the inventory summary sheets are complete and gives you a copy, part of which is reproduced here: \begin{array} { r l c c r } \begin{array} { c } \text { Tag } \\ \text { Number } \end{array} & { \text { Description } } & \text { Quantity } & \text { Price } ( \$ ) & \begin{array} { r } \text { Extended } \\ \text { Value } \end{array} \\ 2683 & \text { Metal clips, X104 } & 768 & \$ 1.50 \text { each } & \$ 1,052 \\ 1888 & \text { Metal strips, 8 } & 1,264 \text { feet } & 0.50 \text { per foot } & 632 \\ 4822 & \text { Pipe, } 3 ^ { \prime \prime } & 852 \text { feet } & 6.00 \text { per yard } & 1,704 \\ 43 & \text { Heavy-duty clamps, No. } 4 & 376 & 1.00 \text { each } & 376 \\ 561 & \text { Heavy-duty pump, } 3 ^ { \prime \prime } & 178 & 4.50 \text { each } & 801 \\ 2184 & \text { Metal struts, 6 } & 125 & 1.20 \text { each } & 150 \\ 3421 & \text { Corner braces, No. 107 } & 52 \text { boxes } & 25.00 \text { per box } & 1,300 \\ 1746 & \text { Rubber inner facing } & \text { 26 dozen } & 15.00 \text { each } & 4,680 \end{array} During the inventory observation, you recorded the following inventory tag control information in your working papers: During the inventory observation, you recorded the following test counts in your working papers: REQUIRED: List the tag numbers identified above on your answer sheet. If you believe the information pertaining to the tag number is correct, so state. If you believe the information is incorrect, describe the error. The information you recorded during your test counts, of course, was 100 \% accurate.$

REQUIRED: List the tag numbers identified above on your answer sheet. If you believe the information pertaining to the tag number is correct, so state. If you believe the information is incorrect, describe the error. The information you recorded during your test counts, of course, was

100 \%

accurate.

When Inventories Are Material and the Auditor Does Not Observe

Multiple Choice

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