Question: In obtaining an understanding of a manufacturing entitys internal control over inventory balances, an auditor most likely would a. Analyze the liquidity and turnover ratios

In obtaining an understanding of a manufacturing entity’s internal control over inventory balances, an auditor most likely would

a. Analyze the liquidity and turnover ratios of the inventory.

b. Perform analytical procedures designed to identify cost variances.

c. Review the entity’s descriptions of inventory policies and procedures.

d. Perform test counts of inventory during the entity’s physical count.

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