The observation of a clients physical inventory is a mandatory auditing procedure when possible for the auditors to carry out and when inventories are material.

Required:

$1-$a$.$ Why is the observation of physical inventory a mandatory auditing procedure? Explain.

$1-$b$.$ Under what circumstances is observation of physical inventory impossible?

$1-$c$.$ Why is the auditors review of the clients control of inventory tags important during the observation of physical inventory? Explain.

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