When inventories are material and the auditor does not observe the inv.docx

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When inventories are material and the auditor does not observe the inventory at or near the year-end, professional standards require the auditor to: disclaim an opinion on the financial statements. thoroughly test the accounting records. observe some physical counts of the inventory. resign from the engagement. Solution When inventories are material and the auditor does not observe the inventory at or near the year-end, professional standards require the auditor to: observe some physical counts of the inventory Note : Note : Professional standards require the auditor to verify the physical count of inventory , if Inventory is material at or near the year-end. .

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