Revision of "Extensions of auditing procedure" relating to inventories;

              AUGUST 1966
STATEMENT ON AUDITING PROCEDURE
Revision of
"Extensions of Auditing Procedure" Relating to Inventories
The independent auditor's procedures with respect to his client's determination of inventory quantities was the subject of a report entitled "Extensions of Auditing Procedure" which was issued by a Special Committee on Auditing Procedure and ap-proved by a vote of the membership of the Institute in 1939.1 This report stated, in part, the following:
That hereafter, where the independent certified public accountant intends to report over his signature on the finan-cial statements of a concern in which inventories are a ma-terial factor, it should be generally accepted auditing pro-cedure that, in addition to making auditing tests and checks of the inventory accounts and records, he shall, wherever practicable and reasonable, be present, either in person or by his representatives, at the inventory-taking and by suitable observation and inquiry satisfy himself as to the effectiveness of the methods of inventory-taking and as to the measure of
1 The Executive Committee of the Institute by resolution on April 29-30, 1966 approved "the issuance of statements on auditing procedure which may modify or revise pronouncements on matters of auditing, previously approved by mem-bers at annual meetings, as consistent with the authority granted to the com-mittee on auditing procedure by the Council."
Issued by the Committee on Auditing Procedure American Institute of Certified Public Accountants
COPYRIGHT 1966 BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, INC. 666 FIFTH AVENUE, NEW YORK, N. Y. 10019