A Client Has Changed Their Method of Valuing Inventory from FIFO

question 104

Multiple Choice

A client has changed their method of valuing inventory from FIFO to LIFO and the change has a material effect on the financial statements.If the auditor does not concur with the appropriateness of the change, the auditor should issue a(n) :

• A)disclaimer.
• B)adverse opinion.
• C)unqualified opinion.
• D)qualified opinion.

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Definitions:

Revocation

The official cancellation or withdrawal of an offer, agreement, or contract.

Defects

Faults or imperfections in a product or service that reduce its quality, functionality, or safety.

Inspected

To have been examined or reviewed carefully, especially to ensure compliance with standards and regulations.

Installment

A method of payment or delivery of goods in parts or portions at agreed intervals over a period of time, usually including interest in the case of financial transactions.