When the Auditor Is Unable to Obtain Sufficient, Appropriate Evidence

question 10

True/False

When the auditor is unable to obtain sufficient, appropriate evidence concerning the beginning inventory, which is material, the report is modified by adding an explanatory paragraph prior to the opinion paragraph and appropriate modification to the scope paragraph.

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Definitions:

Actual Costs

Expenses that have been incurred and recorded, contrasting with estimated or projected costs.

Management

The process of directing, controlling, and organizing resources in an organization towards achieving its goals.

Inventoriable Costs

Costs that are initially recorded as inventory on the balance sheet and recognized as cost of goods sold only when the inventory is sold.

Freight Charges

Costs associated with transporting goods from one location to another, often incurred by the seller to deliver goods to a customer.