When There Are No Perpetual Inventory Files and Inventory Is

question 127

Multiple Choice

When there are no perpetual inventory files and inventory is material,

• A) an audit cannot be performed, so the auditor must issue a disclaimer.
• B) a physical inventory should be taken by the client near the end of the accounting period.
• C) the auditor will have to perform the inventory count and determine valuation.
• D) the auditor need not observe inventory counts but must do test counts.

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Definitions:

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Earnings

Earnings refer to the amount of money an individual makes from work or investments, often considered as a measure of financial success or economic contribution.

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