Obtaining an Adequate Understanding of the Client's Business Is Important

question 24

Multiple Choice

Obtaining an adequate understanding of the client's business is important in physical observation of inventory because

• A)it is required by GAAP.
• B)it will help the auditor in assessing the risk of theft of inventory.
• C)inventory is normally a significant item.
• D)inventory varies significantly for different companies.

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Definitions:

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Linguistic-Relativity Hypothesis

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