Dishware Distribution Limited Uses Average Costing to Cost Its Inventory

question 18

Multiple Choice

Dishware Distribution Limited uses average costing to cost its inventory.It keeps a perpetual inventory file that is linked to its sales systems.It orders inventory in for specific customers as needed,and traditionally has a slow time just before its year-end.Accordingly,inventory at the year-end is about $2000,while materiality is about $30 000.How should the auditor approach the audit of physical inventory?

• A)Exclude testing of physical inventory from the audit program.
• B)Use attribute sampling to select a sample of items to count.
• C)Use dollar-unit sampling to select a sample of items to count.
• D)Count only those items that have a dollar value in excess of $100.

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Definitions:

Internal Buy-in

A term used in business to describe the process of getting support and agreement from all members within an organization for a project or initiative.

Brand Team

A group of professionals within an organization tasked with managing and developing the brand's image, strategies, and marketing efforts to build brand equity.

Influence and Power

The capacity or ability of individuals or groups to effect change or command attention and obedience.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something.