ACCA Audit and Assurance (F8) Practice Exam

What procedure should be followed during the inventory count?

1. Only one auditor should be present

2. Items should be counted by independent teams

3. Items should not be recorded

4. All instructions can be ignored

The correct answer is: Items should be counted by independent teams

During the inventory count, having items counted by independent teams is essential to ensure the integrity and reliability of the process. This method minimizes the risk of errors and fraud by introducing a level of independence and objectivity into the counting procedures. By having separate teams conduct the counting, discrepancies can be identified more easily, and potential bias or collusion can be reduced, thereby enhancing the overall effectiveness of the audit process. In contrast, being limited to just one auditor present could compromise the reliability of the count due to a lack of verification. Not recording items during the count would hinder the ability to track what has been counted and would make it impossible to reconcile findings later. Additionally, disregarding all instructions during the inventory count would lead to disorganized procedures and could result in significant inaccuracies in inventory reporting. Hence, employing independent teams is a best practice that reinforces the credibility of the inventory count.