1.) If a client experienced the below during the fiscal year, what effect would the auditor expect to see on the inventory turnover ratio?

* Items shipped on consignment during the last month of the years were recorded as sales.

* Year-end purchases of inventory were understated by incorrectly excluding items received before the year end.

a.) Inventory turnover would increase

b.) Inventory turnover would not change

c.) Inventory turnover would decrease

2.) You note that your client's ROE has increased significantly from the previous year. This could be the result of

a.) Decrease in profit margin

b.) A two-for-one stock split

c.) Buying back treasury shares near year end

d.) Distributing stock dividends

e.) None of the Above