When There Are No Perpetual Inventory Files and Inventory Is

question 53

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 year-end.
• 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:

Resource Inputs

The materials, labor, and capital that are invested into a system or process to produce goods or services.

Finished Goods

Products that have completed the manufacturing process and are ready for sale or distribution to customers.

Critical Survival Skills

Essential capabilities or proficiencies necessary for individuals or organizations to effectively navigate challenges and maintain viability in their environment.

New Workplace

A term often used to describe a restructured, redesigned, or newly established work environment designed to increase efficiency, productivity, or employee satisfaction.