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 description of inventory policies and procedures.
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.