An auditor selected items for test counts while observing a client's physical inventory. The auditor then traced the test counts to the client's inventory listing. This procedure most likely obtained evidence concerning management's assertion of

An auditor selected items for test counts while observing a client's physical inventory. The auditor then traced the test counts to the client's inventory listing. This procedure most likely obtained evidence concerning management's assertion of

• A. completeness
• B. rights
• C. existence
• D. valuation

Answer: (A)

Tracing from physical inventory to the inventory listing focuses on completeness. By selecting items during the physical count and then verifying that those exact items appear in the inventory listing, the auditor checks whether all items that exist are actually recorded. If every item found on the floor is reflected in the listing, this supports the assertion that the inventory records are complete. This approach does not directly test existence (which would involve verifying that items in the listing correspond to items on hand), nor does it address valuation, rights, or cutoff.

Tracing from physical inventory to the inventory listing focuses on completeness. By selecting items during the physical count and then verifying that those exact items appear in the inventory listing, the auditor checks whether all items that exist are actually recorded. If every item found on the floor is reflected in the listing, this supports the assertion that the inventory records are complete. This approach does not directly test existence (which would involve verifying that items in the listing correspond to items on hand), nor does it address valuation, rights, or cutoff.