Which procedure best tests the valuation of inventory?
AAttending the physical count
BComparing cost with net realisable value for selected linesCORRECT
CInspecting the inventory certificate
DConfirming quantities with suppliers
ICANAudit & AssuranceSubstantive Procedures: Assets and Liabilities2023
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
IAS 2 requires inventory at the lower of cost and net realisable value, so comparing cost to post year end selling prices less costs to sell directly addresses valuation.
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