Most Auditors Would Use a Higher Inherent Risk for Inventory

question 59

Multiple Choice

Most auditors would use a higher inherent risk for inventory when:

• A) inventory turnover slowed during the year.
• B) obsolete inventory has been identified.
• C) there is a large number of errors in the previous year.
• D) both A and C

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Definitions:

Ethical Rules

Guidelines established by professional organizations to govern the behavior and practice standards of their members.

Competence

The ability to do something successfully or efficiently, often referring to the legal capacity to participate in a proceeding.

Legal Ethical Rules

Guidelines that govern the professional conduct of lawyers and legal practitioners to ensure integrity and fairness.

Legal Liability

The legal responsibility one party has for the consequences of their actions or omissions, which may result in harm or loss to another party and require compensation.