Inventory is often a large part of the revenue stream of a company.

Let's assume that you are the external auditor of Apple Distribution, Inc. During the physical count of the inventory at December 31, you determine that there is a $150,000 difference between the physical count balance ($450,000) and the amount on the general ledger ($600,000). Executive management asks you for advice on some possible explanations for the variance. What are some viable explanations?

Answer rating: 100% (QA)

Here are some potential explanations for the variance between the physical inventory count and gener... View the full answer