A Risk to the Auditor Due to the Complexity of Physical

question 28

Multiple Choice

A risk to the auditor due to the complexity of physical inventory includes the possibility of which of the following?

• A)Overstatement of individual items across multiple locations for cutoff testing.
• B)Utility of the items exceeding their cost for existence testing.
• C)Movement of goods during existence testing.
• D)Stocking of only one type of inventory in the warehouse for presentation and disclosure testing.

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Definitions:

Process

A series of actions or steps taken in order to achieve a particular end.

Innate

describes traits, behaviors, or abilities that are present from birth and not acquired through learning or experience.

Imprinting

A rapid form of learning occurring at a particular life stage wherein a young animal forms attachments to or preferences for specific objects or individuals.

Sensitive Period

A sensitive period is a specific time in an individual's development when they are more responsive to certain experiences or learning opportunities.