Auditing Standards State That the Auditor Should Focus Inquiries Regarding

question 2

True/False

Auditing standards state that the auditor should focus inquiries regarding fraud with the board of directors and management of their audit clients, and not spend time making inquiries of personnel outside of the normal financial reporting lines of responsibility.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method where goods first added to inventory are the first ones to be sold.

Ending Inventory

The worth of items ready for sale at the conclusion of an accounting cycle, determined by adding the initial inventory to acquisitions and subtracting the cost of goods sold.

Perpetual Inventory System

A financial recording approach that instantly logs inventory transactions upon sale or purchase using electronic point-of-sale systems and enterprise resource planning software.

LIFO

Last In, First Out, an inventory valuation method that assumes the goods most recently made or purchased are the first to be sold.