Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 278

An internal auditor is assessing the value of inventory in the financial accounts by reviewing the results of an inventory stock count. Which of the following statements is true regarding this approach to collecting evidence?

Answer options

• A. Although the auditor did not physically observe the stock count, the results can be considered reliable.
• B. The stock count results offer sufficient information for the auditor to assess the inventory.
• C. The results of the stock count may be considered relevant information for the purpose of this review.
• D. Tracing the stock count records to the stock items would achieve greater reliability.

Correct answer: C

Explanation

Option C is correct because the results of a stock count are indeed relevant to the auditor's review of inventory value. Options A and B are incorrect as they underestimate the need for direct observation and sufficient data for a reliable assessment, while option D, although it suggests a method to improve reliability, does not directly address the relevance of the stock count results.