Based on Conversations with the Owner-Manager of an Audit Client

question 57

Multiple Choice

Based on conversations with the owner-manager of an audit client, the auditor ascertained that the company's primary motivation is to avoid paying income taxes. Based on this motivation, which account balance assertion for ending inventory will the auditor be most concerned about verifying?

• A)Existence or occurrence.
• B)Completeness.
• C)Rights and obligations.
• D)Observation.

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Definitions:

NAFTA

The North American Free Trade Agreement, an agreement among the United States, Canada, and Mexico designed to remove tariff barriers between the three countries.

Integration

The process of combining or coordinating separate elements or groups into a unified whole, often seen in businesses and technology systems.

Bottom of the Pyramid

A socioeconomic concept that refers to the largest, but poorest group of people in the global population, who live on less than $2.50 a day.

Impoverished Populations

Communities that suffer from a lack of resources and economic instability, often leading to poor living conditions.