If the Auditor Is Appointed After the Year-End of the Client,the

question 6

Multiple Choice

If the auditor is appointed after the year-end of the client,the auditor

• A)should qualify the audit opinion for the inventory balance and cost of sales.
• B)could attend a current perpetual inventory count and roll backward with the records.
• C)should do an inventory count as soon as he is appointed.
• D)will inquire with management about the inventory count performed at year-end.

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Definitions:

Income Statement

A financial statement that shows a company's financial performance, including revenues, expenses, and profits over a specific period.

Current Liability

Obligations or debts that a company must pay within a year from the date of the balance sheet.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial position, showing assets, liabilities, and equity at a specific point in time.

Deduction

An amount that is allowed to be subtracted from gross income in order to reduce taxable income, thus lowering the overall tax liability.