What Should an Auditor Do to Ensure That Inventory Is

Multiple Choice

What should an auditor do to ensure that inventory is stated at the lower of cost and net realizable value?

A) Select a sample of inventory purchases made during the year and check the associated invoice to ensure they are not recorded at more than that value
B) review and test the process used by management, use an independent estimate and review subsequent events
C) ensure that all inventory items on hand at year-end have been properly recorded at cost when purchased.
D) ensure that inventory that is not saleable is disclosed separately in the financial report