If the risk of material misstatement due to fraud for the existence of inventory is high, which of the following is most likely to be a response?

• A. Request that inventories be counted prior to year-end.
• B. Perform analytical procedures rather than taking test counts
• C. Observe test counts of inventory at certain location on an unannounced basis
• D. Request that inventory counts at the various locations be counted on different dates so as to allow the same auditor to be present at every count.

Answer: (C)