All audits should have a well-developed time budget, which is used to determine the audit fee. Suppose
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Question:
All audits should have a well-developed time budget, which is used to determine the audit fee. Suppose your client representative reviewed the time budget and noticed a significant amount of time is being allocated to inventory observation. To reduce audit fees, she proposes a significant reduction in time by offering to provide a representation letter regarding the inventory balance.
- Please explain the sufficiency of this audit evidence,
- then please explain the additional information needed to determine how to respond to the client
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