Read the overview below and complete the activities that follow.

When auditing inventory and cost of goods sold, auditors select the most appropriate procedures for the audit but typically follow the same general pattern.

CONCEPT REVIEW:

While selection of the most appropriate procedures for an audit will be guided by the nature of the internal controls, auditors typically follow the same general pattern of work.

Rank the general steps of the audit process for inventory in the correct order.

Rank the options below.

Perform substantive audit procedure

Perform substantive audit procedure open choices for ranking

No answer

Assess the risks of material misstatement and design further audit procedures

Assess the risks of material misstatement and design further audit procedures open choices for ranking

No answer

Obtain an understanding of internal control over inventories and cost of goods sold

Obtain an understanding of internal control over inventories and cost of goods sold open choices for ranking

No answer

Perform tests of controls

Perform tests of controls open choices for ranking

No answer

Use the understanding of the client and its environment to consider inherent risks, includin

g fraud risks, related to inventories and cost of goods sold