An auditor observes an inventory count by live video link because travel is restricted. What is the main limitation of this approach?
Answer and explanation
Correct answer: D. The auditor cannot easily handle items or judge their condition
- Step 1: Remote techniques can be useful but have limits.
- Step 2: Video makes it hard to touch goods, check quality and be sure of what the camera does not show, so the quality of evidence may be lower.
Answer
The auditor cannot easily handle items or judge their condition.
Why not the others: The video would show the staff counting. A remote attendance does not make the count invalid, though the evidence may be weaker. Cost evidence comes from invoices and costing records, not from attending the count.
Practise more Obtaining assurance evidence.
Free questions with an explanation for every one, and full timed ICAEW ACA Certificate Level mock tests.
More Obtaining assurance evidence questions
- An auditor selects items from the inventory records and then inspects the physical goods in the warehouse. Which assertion is mainly tested…
- Which of the following pieces of evidence is generally the most reliable?
- In a positive receivables circularisation, how does a customer respond?
- Which of the following is a substantive procedure rather than a test of control?
- A company's sales price increased by 4% during the year, volumes were unchanged, but revenue has risen by 10%. What should the auditor do ab…
- Which procedure best tests cut-off for sales?