When an outside specialist has assumed full responsibility for taking the client's physical inventory, reliance on the specialist's report is acceptable if
a. The auditor is satisfied through the application of appropriate procedures as to the reputation and competence of the specialist.
b. Circumstances made it impracticable or impossible for the auditor either to do the work personally or observe the work done by the inventory firm.
c. The auditor conducted the same audit tests and procedures as would have been applicable if the client employees took the physical inventory.
d. The auditor's report contains a reference to the assumption of full responsibility.
Answer: C
CPA Exam
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