When auditors want to use a client’s sales forecast for general familiarity with the production cycle or for evaluation of slow- moving inventory, what kind of procedures should be performed with respect to the forecast?
Answer to relevant QuestionsIf the actual sales for the year are substantially lower than the sales forecasted at the beginning of the year, what potential valuation problems could arise in the production cycle accounts?What procedures do auditors employ to audit inventory when the physical inventory count is taken on a cycle basis or on a statistical plan but never a complete count on a single date?What documentation should an auditor inspect when a client has paid off a bank note? How could an employee defraud the company if the bank note has no indication of being paid?What unfortunate lesson did the auditors learn from the situation in the Unregistered Sale of Securities case? What should auditors do when a violation of U. S. securities laws is suspected?Which of the following is the most important audit consideration when examining the stockholders’ equity section of a client’s balance sheet? a. Changes in the capital stock account are verified by an independent stock ...
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