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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit procedures and obtaining evidence

Auditors of Bellwether Ltd attend the year-end inventory count of a warehouse holding electronic components. Which procedure performed during the attendance best addresses the completeness of the client's count records?

Selecting items from the warehouse floor and tracing them to the count sheets best tests completeness, because it shows whether physical inventory present has been recorded. Going from sheets to the floor tests existence instead, and agreeing totals to the ledger does not test whether everything was counted.

  1. ASelecting items from the count sheets and tracing them to the physical inventory
  2. BSelecting items from the physical inventory on the floor and tracing them to the count sheetsCorrect
  3. CAgreeing the total of the count sheets to the general ledger after the count
  4. DObserving that count teams are working in pairs

Explanation

Completeness is tested by selecting from the physical items and tracing to the records, as items present but unrecorded would otherwise be missed. Option A tests existence. Option C tests agreement of records to the ledger, not whether all items were counted. Option D is an observation of control but not a completeness test of the records.

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