Which of the following is a substantive test in relation to completeness? a. Inspect physical inventory, checking from physical stock to inventory records. b. Enquire of management and scan inventory records to identify any obsolete, excess or slow-moving inventory. c. Inspect physical inventory, checking from inventory records to physical stock. d. Recalculate depreciation or depletion calculations.

Q: Which of the following is not an advantage of a perpetual inventory system? a. Assists in the…

A: The perpetual inventory method is a much better method in comparison to the periodic inventory…

Q: Which of the following management assertions is an auditor most likely testing if the audit…

A: Management Assertion:   Management assertion refers to the claim made by the management assuring…

Q: Determine the effects of inventory errors on the financial statements.

A: If you understated ending inventory, your cost of goods sold will be overstated by the error amount,…

Q: If the auditor conducts test of the inventory controls at an interim date, is it appropriate to…

A: As a part of audit procedure test of controls are used to test the effectiveness of a control used…

Q: An auditor most likely would analyze inventory turnover rates to obtain evidence concerning…

A: Inventory turnover rate is the rate which shows how many times a company has sold and replaced it's…

Q: Why do auditors consider inventory errors pervasive?

A:

Q: Explain whether or not analytical review procedures would be sufficient for the audit of the…

A: Auditing is the examination and verification of the financial statements prepared by the entity and…

Q: When auditing inventories, an auditor would least likely verify thata. All inventory owned by the…

A: Answer:   Option a

Q: Indicate the effects of inventory errors on the financial statements

A: Solution- 1-A merchandising company must be sure that it has properly valued its ending inventory.…

Q: Which of the following is not an advantage of a perpetual inventory system? a. assits in the…

A: Under the perpetual inventory system, transaction related to the inventory is updated immediately as…

Q: Explain issues that analysts should consider when examining a company’s inventory disclosures and…

A: Inventory Disclosure: Inventory disclosure is useful for management to evaluate inventory…

Q: Which of the following statements about merchandisingactivities is true? (More than one answer may…

A: Merchandising activities means activities of purchase and sale of goods that are ready for sale.…

Q: An auditor usually traces the details of the test counts made during the observation of physical…

A: An auditor traces the details of test counts of physical inventory to final inventory compilation in…

Q: What is an inventory roll-forward? What roll-forward tests should be performed?

A: It is the systematic development by way of (rolling forward) pre-accounting data of fresh reporting…

Q: 1, how can assets and liabilities be classified for a more informative balance sheet?

A: Introduction :- A classified balance sheet is a financial statement with classifications like…

Q: Which of the following audit procedures probably would provide the most reliable evidence related to…

A:

Q: What analytical procedures might reveal obsolete or slow-moving inventory?

A:

Q: You are testing inventory.  You determined that inventory exists, nothing is missing from inventory,…

A: The following are some examples of inventory risks: Due to the difficulty of valuing inventory, it…

Q: What is the primary purpose of analytical procedures performed during the planning stages of the…

A: Solution: Analytical Procedures refers to the evaluation of financial information via identifying…

Q: Importance of Inventory Valuation What needs to be considered when not only counting inventory, but…

A: SOLUTION- INVENTORY IS GOODS LYING IN THE STOCK OF THE ENTITY WHICH IS EITHER PURCHASED OR…

Q: Explain the significant inherent risks associated with inventory. Explain the process of physical…

A: Internal controls mean to control the internal activities of the company. the internal control is…

Q: Why is inherent risk for the existence of inventory an issue in the expenditure cycle audit?

A:

Q: An auditor selected items for test counts while observing a client’s physical inventory. The auditor…

A: Management assertion: Management assertion refers to the claim made by the management assuring about…

Q: Describe the typical approach for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies need to…

Q: Which of the following is not a reason for the physical inventory count to differ from what…

A: Inventory is one of the important current asset of the business. This can be in form of raw…

Q: Which of the following timing of inventory count is the best based on the auditor’s point of view…

A: Answer: Concept Control risk               Control risk means risk that the internal control…

Q: Which of the following is false regarding a perpetualinventory system?a. Physical counts are never…

A: Option “a” is the correct answer that is physical counts are never needed because records are…

Q: Define Inventory Turnover?

A: “Since you have asked multiple questions, we will solve the first question for you.  If you want a…

Q: An auditor selected items for test counts from the client’s warehouse during the physical inventory…

A: Definition: Management assertion: Management assertion refers to the claim made by the management…

Q: the auditor picks an item of inventory from the warehouse and determines whether it is included in…

A: Management assertions are the claims made by executives regarding certain aspects of a business. The…

Q: Assuming that the auditor properly documents receiving reportnumbers as a part of the physical…

A: Cut off procedures are those procedures in which the departments in the business would have their…

Q: How does inventory control deficiencies affect the development of audit procedures for inventories

A: Answer: The audit procedures are to be designed such that the total audit evidences can be…

Q: Some inventory errors are said to be “self-correcting,” in that the error has the opposite financial…

A: Errors: Despite best efforts, occasionally an error is made on the financial statement. Most often,…

Q: You have been asked by the financial vice president to develop a short presentation on the LCNRV…

A: a. As per GAAP, the inventory is to be valued at the lower of its cost i.e. the laid down cost or…

Q: Explain Potential Misstatements- Inventory/ Cost of Goods Sold and the description of misstatements…

A: Internal control is a procedure for insuring that an organization's objectives in operational…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.