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Auditors Examine the Physical Environment of the Computer Center as Part

question 87

Essay

Auditors examine the physical environment of the computer center as part of their audit.Many characteristics of computer centers are of interest to auditors.What are they? Discuss.


Definitions:

Estimating Inventories

The process of approximating the quantity and value of inventory a business has on hand.

Gross Profit Method

A technique to estimate inventory cost by using the gross profit margin, often used when physical inventory counts are impractical.

Financial Statement Effects

The impact of transactions on the financial statements, affecting the balance sheet, income statement, and cash flow statement.

Ending Inventory Overstatement

This occurs when the reported amount of inventory at the end of a period is higher than its actual value, which can distort financial statements.

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