As Part of the Audit of Valuation, the Auditor Is

question 29

Multiple Choice

As part of the audit of valuation, the auditor is conducting pricing tests by comparing to supplier invoices. The auditor is making sure that, for each item tested, sufficient supplier invoices are examined to cover the quantity of inventory that was on hand during the physical inventory count. What type of pricing error could this detect?

• A) the client valued their inventory on the basis of the most recent invoice only
• B) the client has used the incorrect accounting method to value its inventory
• C) extension errors could occur with numerous different inventory items
• D) the wrong inventory count quantity could have been recorded on the count sheets

---

Definitions:

Willingness To Pay

The maximum amount an individual is prepared to spend for a good or service, reflecting the value they place on it.

Communications Network

A system of interconnected computers, telephones, or other devices that enables the exchange of data and information.

Consumer Type

Consumer type refers to the categorization of consumers based on their preferences, behaviors, and economic characteristics.

User-Friendly Textbook

A textbook designed with special consideration for ease of understanding, readability, and accessibility to facilitate learning.