Company B has outdated inventory costing $300,000 in the warehouse that is held for over 2 years. It is expected that the inventory would be sold to the customers at only 50% of the cost next year. The client has a net income of $2,000,000. Management claimed that the inventory has not been sold and therefore it should be continued to record at cost. Q）Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
Company B has outdated inventory costing $300,000 in the warehouse that is held for over 2 years. It is expected that the inventory would be sold to the customers at only 50% of the cost next year. The client has a net income of $2,000,000. Management claimed that the inventory has not been sold and therefore it should be continued to record at cost. Q）Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
Chapter10: Inventory
Section: Chapter Questions
Problem 15EB: Tanke Company reported net income on the year-end financial statements of $850,200. However, errors...
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Company B has outdated inventory costing $300,000 in the warehouse that is held for over 2 years. It is expected that the inventory would be sold to the customers at only 50% of the cost next year. The client has a net income of $2,000,000. Management claimed that the inventory has not been sold and therefore it should be continued to record at cost.
Q）Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
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