During a routine internal audit at a manufacturing company, the auditor discovers that the inventory records do not match the physical stock. What should the auditor's next step be to address this discrepancy? ○ A. Ignore the discrepancy as it's probably a minor error. ○ B. Investigate the discrepancy further to understand its cause and recommend corrective measures. ○ C. Adjust the records to match the physical stock without investigation. ○ D. Immediately accuse the inventory manager of fraud.

During a routine internal audit at a manufacturing company, the auditor discovers that the inventory records do not match the physical stock. What should the auditor's next step be to address this discrepancy? ○ A. Ignore the discrepancy as it's probably a minor error. ○ B. Investigate the discrepancy further to understand its cause and recommend corrective measures. ○ C. Adjust the records to match the physical stock without investigation. ○ D. Immediately accuse the inventory manager of fraud.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 28RQSC

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EXPLAIN IT SIMPLE AND BRIEFLY. YOU CAN ALSO INCLUDE EXAMPLES.