When Perpetual Inventory Records Are Maintained in Quantities and in Dollars

question 45

Multiple Choice

When perpetual inventory records are maintained in quantities and in dollars and internal control over inventory is weak, the auditor would probably:

• A)want the entity to schedule the physical inventory count at the end of the year.
• B)insist that the entity perform physical counts of inventory items several times during the year.
• C)increase the extent of tests for unrecorded liabilities at the end of the year.
• D)have to disclaim an opinion on the income statement for that year.

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Definitions:

Grit

A personality trait characterized by perseverance and passion for achieving long-term goals despite obstacles.

Acceptable Mistake

An error or fault that is deemed permissible within a certain context or situation, often seen as a learning opportunity.

Blame-free Environment

A culture that focuses on problem-solving rather than assigning fault, encouraging open communication and learning.

Angela Lee Duckworth

A psychologist recognized for her studies on persistence and determination as crucial elements for success.