An Auditor Has Determined That There Is a High Risk

question 20

Multiple Choice

An auditor has determined that there is a high risk that her client has overvalued inventory.Which audit assertions would require additional testing?

• A)accuracy and existence
• B)allocation and accuracy
• C)accuracy and valuation
• D)valuation and classification

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Definitions:

Excise Tax

A tax charged on specific goods and services, such as alcohol, tobacco, and fuel.

Government Revenue

The income received by the government from taxes, non-tax sources, and other fiscal policies.

Latte

A latte is a coffee drink made with espresso and steamed milk, often enjoyed in various flavors and styles across coffee shops globally.

Tax Incidence

The study of who bears the final burden of a tax, including how it is distributed between producers and consumers.