If the Auditor Is Appointed After the Year-End of the Client,the

question 6

Multiple Choice

If the auditor is appointed after the year-end of the client,the auditor

• A)should qualify the audit opinion for the inventory balance and cost of sales.
• B)could attend a current perpetual inventory count and roll backward with the records.
• C)should do an inventory count as soon as he is appointed.
• D)will inquire with management about the inventory count performed at year-end.

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Definitions:

Industry Price

The general price level for goods and services within a specific industry, influenced by market conditions, production costs, and demand.

Long-run Equilibrium

A state in an economy or market where all factors of production and economic agents are fully adjusted to the conditions and thus remain stable over time.

Economic Profit

The financial contrast between aggregate income and total spending, factoring in both specific and vague costs.

Identical Cost Curves

Cost curves that are exactly the same for all firms in a market, usually indicative of perfect competition.