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:

Common Law

A legal system based on custom and court rulings rather than written laws, predominant in the UK and countries influenced by its legal traditions.

Federal Court System

The judiciary system of the United States, which includes the Supreme Court, appellate courts, and district courts, among others, responsible for interpreting and applying federal law.

Common Law

A body of law derived from judicial decisions and customs, as opposed to statutes.

Case Law

consists of past court decisions that establish precedents in legal reasoning and interpretations of statutes which are used to guide future cases.