In Obtaining an Understanding of a Manufacturing Entity's Internal Control

Multiple Choice

In obtaining an understanding of a manufacturing entity's internal control concerning inventory balances, an auditor most likely would:

A) Review the entity's descriptions of inventory controls.
B) Perform test counts of inventory during the entity's physical count.
C) Analyze inventory turnover statistics to identify slow-moving and obsolete items.
D) Analyze monthly production reports to identify variances and unusual transactions.