Your Audit Client Has Not Written Inventory Down to Net

question 40

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 8 per cent and net profit before income tax by 12 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:

Money Supply

The sum of monetary holdings in an economy, which includes cash, coins, and the balances in checking and saving accounts, at a specific instant.

Standard of Value

A criterion that allows the value of various goods and services to be compared.

Store of Value

A store of value is an asset that maintains its value over time without depreciating, allowing it to be saved, retrieved, and exchanged at a later time.

Medium of Exchange

A mediating tool or mechanism that enables the buying, selling, or exchanging of products among individuals or groups.