It Is Not Necessary to Audit a Firm's Financial Statements

question 149

True/False

It is not necessary to audit a firm's financial statements if the firm has used generally accepted accounting principles.

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Definitions:

Error

An unintentional misstatement or omission in financial statements or accounting records, typically requiring correction once discovered.

Perpetual Inventory System

The perpetual inventory system is a method of accounting for inventory that records sales and purchases instantly through computer systems, maintaining continuous balance updates.

LIFO

LIFO (Last In, First Out) is an inventory valuation method where the most recently produced or acquired items are the first to be expensed.

Cost of Goods Sold

Expenses directly related to manufacturing the products a company sells, involving costs of materials and labor.