Your Audit Client Has Not Written Inventory Down to Net

question 17

Multiple Choice

Your audit client has not written inventory down to net realisable value in accordance with approved accounting standards. The write-down would reduce current assets by 15 per cent and net profit before income tax by
11 per cent. What type of auditor's report should you issue?

• A) An unmodified opinion with an Emphasis of Matter paragraph.
• B) A disclaimer of opinion.
• C) An adverse opinion.
• D) A qualified opinion.

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Definitions:

Human Brain

The central organ of the human nervous system, responsible for thought, memory, emotion, touch, motor skills, vision, breathing, temperature, hunger, and every process that regulates our body.

Heuristics

Mental shortcuts or "rules of thumb" that simplify decision-making processes, often used when facing complex problems or incomplete information.

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Net Benefits

The total benefits of some activity or policy less the total costs of that activity or policy.