What Is the First Step That the Auditor Takes When

question 37

Multiple Choice

What is the first step that the auditor takes when auditing the valuation of inventory?

• A)Conduct analytical review,comparing gross margin for the current year to the prior year.
• B)Do an industry analysis to determine whether there is a potential for technology-induced obsolescence.
• C)Ask the client about the level of obsolete inventory that was on hand and counted during the inventory count.
• D)Clearly establish the valuation method used and how the calculations are being performed.

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Definitions:

Skin Cancer

A type of cancer that develops in the cells of the skin, often due to exposure to ultraviolet radiation from the sun or tanning beds.

UV's

Short for ultraviolet rays, which are electromagnetic radiation with a wavelength shorter than that of visible light but longer than X-rays.

Pearson Coefficient

A measure of the linear correlation between two variables, ranging from -1 to 1, where 1 implies a perfect positive correlation and -1 a perfect negative correlation.

Incidence of Skin Cancer

The rate or frequency at which new cases of skin cancer occur in a specified population over a given time period.