When the Auditor Performs an Audit or Review of Half-Year

question 17

Multiple Choice

When the auditor performs an audit or review of half-year financial statements, they are not required to:

• A) circulate the audit report to entity members.
• B) consider aspects of the audit process relevant to the current audit for the forthcoming full-year financial statements.
• C) treat each half-year as a discrete reporting period.
• D) conduct the review in accordance with auditing standards.

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Definitions:

Perpetual Inventory System

A method of inventory management that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Ending Inventory

The total value of all goods still available for sale at the end of an accounting period.

FOB Destination

A shipping term indicating that the seller bears the shipping costs and retains ownership of the goods until they are delivered to the buyer's location.

Inventory Records

Documentation and tracking of the quantity, value, and turnover of a business's inventory, including raw materials, work-in-progress, and finished goods.