[Anonymous]

Hi.

I’m currently working on Simulations of AUD4-2(becker) and got an explanation which says “observing the client count the physical inventory can provide evidence about existence, completeness, rights and obligations, but not about Valuation.”

However, in my understanding, observation of inventory can get an auditor important evidence regarding valuation, since the auditor sees inventory him/herself and can check the condition of inventory, getting the knowledge about the reasonableness of the stated $amount in the FS. I know an auditor has to have at least a basic knowledge about the inventory they observe.

Would anyone please help me??