The auditor is always concerned whether slow-moving or potentially obsolete inventory is included in inventory, and whether inventory should be reduced to a lower market value. Identify five substantive audit procedures the auditor might use to determine the existence of obsolete goods or goods whose market value is less than cost.
Answer to relevant QuestionsExplain the purpose of test counts and other inventory observations that the auditor notes while a physical inventory is being taken.Refer to the Professional Judgment in Context feature "Thor Industries, Inc. and Mark Schwartzhoff: Fraudulent Reductions in Cost of Goods Sold Through Manipulation of Inventory Accounts." Answer the following questions.a. ...Refer to the Auditing in Practice feature "Examples of Fraud in the Physical Observation of Inventory." The AICPA's Practice Alert described in the feature provides examples of many types of inventory frauds that have ...TRUE-FALSE QUESTIONS1. Long-lived assets are typically immaterial for most organizations.2. Patents are an example of long-lived assets.3. The pervasiveness of management estimates is a factor that heightens the inherent ...Explain how a skeptical auditor might come to understand management's potential for adjusting earnings through manipulation of fixed-asset accounts.
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